The numbers you need from the offer
Before calculating anything, get the offer's details in writing. You need the amount funded, every fee and whether it is deducted up front or billed later, the payment amount, how often payments are taken, and either the number of payments or the total repayment amount. If any figure is unclear, ask the funder before signing.
- Amount funded
- Fees deducted at funding, and any fees charged later
- Payment amount and frequency: daily, weekly or monthly
- Number of payments, or the total repayment amount
- Whether any part of the payment can change, such as a variable rate or a percentage of sales
If you already have an offer, write these five items down now. The rest of the worksheet needs only basic arithmetic.
Step 1: Add up everything you will repay
Total repaid equals the payment amount times the number of payments, plus any fees paid separately over the term. For offers stated as a total repayment amount, such as a factor-rate offer, that figure is your starting point. Include every scheduled payment, not just the principal.
Total repaid = payment × number of payments + fees paid separately
Example, Offer A: $50,000 funded, repaid in 26 weekly payments of $2,300. Total repaid is $2,300 × 26 = $59,800. This is an illustrative offer, not a quote or a typical rate.
| Worksheet line | Offer A (weekly) | Offer B (monthly) |
|---|---|---|
| Amount funded | $50,000 | $50,000 |
| Fees deducted | $1,500 | $0 |
| Net proceeds | $48,500 | $50,000 |
| Total repaid | $59,800 | $58,800 |
| Total cost | $11,300 | $8,800 |
| Cost per dollar | 23.3 cents | 17.6 cents |
| Cost per dollar per month | 3.9 cents | 1.5 cents |
Step 2: Find the cash you actually receive
Net proceeds are the amount funded minus fees deducted at funding and any balance netted out of the deposit. This is the money you can actually use, and it is the right base for measuring cost. Total cost equals total repaid minus net proceeds.
Net proceeds = amount funded − fees deducted − any amount netted out
Total cost = total repaid − net proceeds
Example, Offer A: a $1,500 fee is deducted, so $48,500 is deposited. Total cost is $59,800 − $48,500 = $11,300. Notice that the fee counts twice in effect: it adds to cost and reduces the cash you receive.
Step 3: Calculate cost per dollar
Divide total cost by net proceeds to get cost per dollar. It tells you how many cents you pay for each dollar you actually receive, which lets you compare offers of different sizes. On its own, though, it ignores time, which is why Step 4 matters.
Cost per dollar = total cost ÷ net proceeds
Example, Offer A: $11,300 ÷ $48,500 = about 23.3 cents per dollar received.
Step 4: Adjust for how long you have the money
Divide cost per dollar by the number of months in the term to get cost per dollar per month. The same dollar cost weighs more when it is paid over a shorter period, because you have the money for less time. This step is what lets a six-month offer and a twelve-month offer sit on the same line.
Cost per dollar per month = cost per dollar ÷ months in the term
Example: Offer A's 26 weekly payments last about 6 months, so it costs about 3.9 cents per dollar per month. Offer B funds $50,000 with no fee and 12 monthly payments of $4,900, or $58,800 in total. Its cost is $8,800, about 17.6 cents per dollar, or 1.5 cents per dollar per month. Offer B costs less in dollars and much less per month, but you carry payments twice as long. Both offers are illustrative. For a full side-by-side, use the two-offer worksheet.
Variable payments and lines of credit
When payments are a percentage of sales, the total repaid is usually fixed but the term is not. Run the worksheet with a fast and a slow repayment scenario. For a line of credit, estimate cost from how you expect to draw and repay: average balance times rate times months, plus draw and other fees.
Example: a percentage-of-sales offer with a fixed total might repay in six months if sales hold and nine if they slow. The dollar cost is the same, but cost per dollar per month is lower in the slower case, while cash stays tighter for longer. Run both. For how remittances work, see revenue-based financing; for line math, see business line of credit. Illustrative only.
Frequently asked questions
What fees should I include in the true cost?
Include every fee you will pay because of the funding: origination or underwriting fees deducted at funding, closing or documentation fees, draw fees, and any recurring maintenance or servicing fees. Fees deducted up front reduce the cash you receive, so subtract them from the amount funded as well as counting them in the cost.
Why does a shorter term make the same dollar cost more expensive?
Because you have the money for less time. Paying $10,000 to use funds for six months is twice as costly per month as paying $10,000 to use them for twelve. Cost per dollar per month captures that. It is also why short-term offers can show a high estimated APR even when the dollar cost looks moderate.
Is total cost or APR the better comparison?
Use both when you have them. Total cost in dollars tells you what the funding takes out of your business. An APR or cost per dollar per month adjusts for time, so offers with different terms can be compared. If an offer includes a disclosed APR, use it alongside your own dollar calculation.
How do I handle a variable payment amount?
Use the fixed total repayment if the offer has one, and run the worksheet with two or three possible terms, such as a fast, expected and slow repayment. For variable-rate loans, rerun the payment calculation at a higher rate to see how much the cost could rise, and check that your cash flow can absorb it.
What numbers do I need from the offer?
The amount funded, every fee and when it is charged, the payment amount and frequency, and either the number of payments or the total repayment amount. Ask the funder to put any missing figure in writing. Without these, you cannot calculate what the funding really costs.
Run the worksheet on real offers
Apply once, then check every offer from our funding partners with these four steps.
Updated September 14, 2026 · Roifunder Funding Team