Factors that commonly affect pricing

No two commercial funding offers are priced identically, and no website can quote a universal rate. In practice, providers commonly weigh a combination of factors when pricing a request: time in business, average monthly revenue or bank deposits, industry risk, existing debt obligations, requested amount, repayment term and, depending on the product, personal credit.

Two businesses with similar revenue can receive different pricing because one carries existing advances that reduce available cash flow, or because one operates in an industry a particular provider treats as higher risk. Pricing reflects the specific file, not a published rate card.

Why the underlying structure changes the comparison

A merchant cash advance is commonly priced using a factor rate applied to the amount advanced, while a traditional loan uses an interest rate and APR. These are not directly interchangeable, and converting one into the other requires knowing the actual repayment period, which can vary from the advertised estimate depending on real sales volume. Review the factor rate vs. APR guide for how to approach that comparison.

Invoice factoring is typically priced as a periodic fee against the invoice value, while equipment financing may combine an interest rate with a down payment and the asset itself as collateral. Comparing "cost" across structures only works when you normalize to the same figures: net proceeds, total dollar repayment and estimated timeframe.

Fees that are easy to miss

  • Origination or underwriting fees deducted from net proceeds before funds are disbursed.
  • Draw fees on a line of credit each time funds are accessed.
  • Maintenance or non-usage fees charged on an unused credit line.
  • Renewal or stacking costs if a new advance pays off an existing one before it is complete; see the guide on MCA renewals and stacking.
  • Early-completion or prepayment terms, which can either reduce or have no effect on total cost depending on the specific contract.
Ask directly: "What is the total dollar amount I will pay beyond what I receive today, and are there any fees not included in that number?" A provider unwilling to answer plainly is a warning sign, not a sign of a better deal.

A simple comparison checklist

  1. Net proceeds actually deposited to your account.
  2. Total dollar amount to be repaid, all fees included.
  3. Payment amount and frequency.
  4. Estimated repayment period under normal, not best-case, sales.
  5. Collateral, personal guarantee and default terms.
  6. Early-completion or prepayment treatment.

Request these figures in writing from every provider you compare, using the same requested amount and use of funds. That is the only way to see genuine cost differences rather than differences created by comparing dissimilar structures.