The five lines
Every funding offer, whether a loan, an advance or a line of credit, can be reduced to five numbers. Once both offers sit on the same lines, differences in how they are quoted, such as a factor rate versus an interest rate or daily versus monthly payments, stop getting in the way of a fair comparison.
- Cash received = amount funded − fees deducted at funding
- Total repaid = payment × number of payments + separate fees
- Total cost = total repaid − cash received
- Monthly equivalent payment = daily × about 21, or weekly × about 4.33, or the monthly payment
- Cost per dollar per month = (total cost ÷ cash received) ÷ months in the term
Worked example: Offer A versus Offer B
Two illustrative offers for the same amount show why all five lines matter. Offer A is shorter with daily payments and a smaller fee. Offer B is longer with monthly payments and a larger fee. Neither is automatically better; each wins on different lines, and the table shows where.
Example, Offer A: $60,000 funded, a $1,200 fee, and $75,000 repaid over 6 months in business-day payments of about $595. Cash received is $58,800; total cost is $16,200; the monthly equivalent is about $12,500; cost per dollar per month is about 4.6 cents.
Example, Offer B: $60,000 funded, a $2,400 fee, and 12 monthly payments of $6,200, or $74,400 in total. Cash received is $57,600; total cost is $16,800; cost per dollar per month is about 2.4 cents.
Offer A costs $600 less in total dollars. Offer B has a payment about half the size and costs roughly half as much per month of use. Both offers are illustrative, not quotes.
| Line | Offer A (6 months, daily) | Offer B (12 months, monthly) | Better on this line |
|---|---|---|---|
| Cash received | $58,800 | $57,600 | A |
| Total repaid | $75,000 | $74,400 | B |
| Total cost | $16,200 | $16,800 | A |
| Monthly equivalent payment | about $12,500 | $6,200 | B |
| Cost per dollar per month | about 4.6 cents | about 2.4 cents | B |
Which line matters most?
It depends on your situation. If cash flow is tight, the monthly equivalent payment decides whether an offer is even workable. If you need the money only briefly, total dollar cost matters most. If you will use the money for the full term of both offers, cost per dollar per month is the fairest measure of price.
- Tight cash flow: start with the monthly equivalent payment, then cost
- Short need: compare total dollar cost for the time you actually need the money
- Long-lived use: compare cost per dollar per month
Whatever you prioritize, never choose on payment size alone; a lower payment often comes from a longer term that raises total cost.
Comparing offers with different terms fairly
A longer offer gives you the money for longer, but that time only has value if you use it. If you need funds for six months, a twelve-month offer means paying for six months you do not need, unless early repayment reduces the cost. Whether it does depends on the contract, so ask the funder in writing.
Example: if the business only needs the money for six months, Offer B's $16,800 cost buys twelve months of use it will not fully need, and Offer A's shorter term may be the better value despite its higher payment. If the business will use the money for a year, Offer B spreads a similar dollar cost over twice the time. Illustrative only. See the true-cost worksheet for the underlying steps.
Check the payment against your cash flow
The cheapest offer is worthless if its payment strains your account. Compare each monthly equivalent payment with the cash your business keeps each month after all costs, and then test it against a slower month. An offer that leaves no cushion should drop off your list, however attractive its cost.
Example: a business keeping $18,000 a month after costs would give up about 69 percent of it to Offer A's payment and about 34 percent to Offer B's. In a month when cash left falls by a third, to $12,000, Offer A's payment would exceed it. Illustrative figures. Run the revenue-drop stress test on both, and convert daily payments with this guide.
What else to compare besides cost
Cost and payment are the core, but not everything. Read your contract for each offer in full, and ask the funder to confirm in writing anything unclear: whether early repayment changes the cost, whether the payment schedule can change if sales drop, and every fee that could apply. Compare how soon each offer funds against when you actually need the money.
- Does repaying early change the cost, and by how much?
- Can the payment schedule be adjusted, and under what conditions?
- Are there fees beyond those in the offer summary?
- Does the funding timeline match when you need the money?
For the steps from application to offer, see How It Works.
Frequently asked questions
Which number matters most when comparing offers?
There is no single answer. If cash flow is tight, the monthly equivalent payment decides whether an offer is workable. If you need the money briefly, total dollar cost matters most. If you will use the money for the full term, cost per dollar per month is the fairest price comparison. Look at all five lines.
How do I compare offers with different terms?
Use cost per dollar per month to adjust for time, then ask how long you actually need the money. A longer offer is only worth its extra months if you use them. If you would repay early, ask each funder in writing whether early repayment changes the cost, and compare the offers on that basis.
What if one offer has a fee and the other does not?
Subtract fees deducted at funding from the amount funded to get the cash you receive, and count the fee in total cost. A fee can make an offer with a lower rate or factor cost more than an offer with no fee, especially on a short term. The five-line comparison captures this automatically.
Should I pick the offer with the lowest payment?
Not on payment alone. A lower payment often comes from a longer term, which usually raises the total you repay. Choose the lowest-cost offer whose payment your cash flow can carry with a cushion in a slow month. If only the lower-payment offer is affordable, that may be the right choice, knowingly.
What else besides cost should I compare?
Read each contract in full and ask the funder to confirm in writing whether early repayment changes the cost, whether the schedule can change if sales drop, and every fee that could apply. Also compare when each offer would fund against when you actually need the money.
Line up your offers
Apply once and compare options from our funding partners on all five lines.
Updated September 14, 2026 · Roifunder Funding Team