Compare options in dollars, not labels
Every option can be reduced to the same few numbers: cash you actually receive, total you repay, total cost, monthly equivalent payment and cost per dollar per month. Once offers are on those lines, a factor rate, an interest rate and a draw fee become directly comparable, and the lower payment stops being mistaken for the lower cost.
Use the true-cost worksheet for one offer and the two-offer comparison when you have more than one. Faster money usually costs more, and a longer term usually lowers the payment while raising the total.
Match the option to the use of funds
Short needs fit short money, and long-lived assets fit longer terms. A payroll gap before a job pays is a different problem from a machine that will earn for years. Matching the term to how long the benefit lasts is the simplest way to avoid paying for money after it has stopped earning.
- Short cash gaps: working capital or a line of credit
- Equipment: equipment financing
- One-time investments: term loans or an SBA-backed option when time allows
- Sales-driven businesses: revenue-based financing
| Option | Payment style | Main cost drivers | Often fits |
|---|---|---|---|
| Working capital | Daily, weekly or monthly | Total repaid vs. cash received, term length | Short, specific gaps |
| Equipment financing | Usually monthly | Rate, term, down payment | Machines, vehicles, tools |
| Line of credit | Weekly or monthly on balance | Interest while carried, draw fees | Repeated short needs |
| Term loan | Usually monthly | Rate, term, closing fees | One-time investments |
| Revenue-based financing | Daily or weekly remittance | Factor rate, fees, repayment speed | Steady card or deposit sales |
| SBA-backed loan | Monthly | Rate, fees, time to fund | Larger projects with time to wait |
Frequently asked questions
Which type of business funding is usually the least expensive?
Longer-term, well-documented options such as SBA-backed or conventional term loans often carry a lower total cost, while faster, short-term options usually cost more per month. But the least expensive offer on paper is not always the best value if waiting costs you profit. Compare total cost against what the money earns.
Why does faster funding usually cost more?
Faster decisions typically rely on less documentation and shorter terms, which means more risk for the funder and a cost concentrated into fewer months. Whether that is worth it depends on what the funds earn and what waiting would cost you. The cost-versus-time math is on our SBA comparison page.
How do I compare a daily-payment offer with a monthly loan?
Convert both to the same terms. Multiply the daily payment by about 21 business days for a monthly equivalent, then compare cash received, total repaid, total cost and cost per dollar per month. Also check which payment your deposits can carry in a slow month.
Can Roifunder help me choose?
Yes. Apply once, and we work with our funding partners to show options that fit your numbers. Requirements vary by product and funder; many look at time in business, monthly revenue and credit. We encourage you to run the true-cost and payback math on every offer before accepting.
See what fits your numbers
One application to compare options from our funding partners.
Updated September 14, 2026 · Roifunder Funding Team