Guides
How to Compare Business Loan and Funding Offers
A five-line worksheet that reduces any stack of funding offers to one comparable number — total payback per dollar landed — and a verdict in ten minutes.
The short answer
Reduce every offer — business loan, line of credit, or revenue-based funding — to five lines: what lands in your account, total payback, cost per netted dollar, that cost divided by the term in months, and the payment with its frequency. Dollars are comparable where quoted rates are not. Rank by cost per dollar per month, then check the payment against your deposits. The biggest approval is rarely the winner.
Key takeaways
- Net funded and total payback are the only two numbers every offer type shares — start there.
- Cost per netted dollar, divided by the term in months, makes offers of different sizes and lengths comparable.
- The biggest approval headline is often the most expensive money on the desk.
- An offer that fails the payment test is not cheap at any price.
- Comparing the offers you hold is diligence; mass-submitting your file to collect more reads as risk.
By the time you are comparing offers, you have already done the hard part — someone read your file and said yes. What lands on the desk next is rarely readable. One offer is a bank's business loan quoted as an interest rate with a fee schedule stapled behind it, another is quoted as a factor rate, a third as a monthly payment. Each arrives dressed in its most flattering number, and none of the flattering numbers can be compared with one another.
This guide is the follow-through to our seven questions to ask before you sign. Those questions collect the raw answers; this worksheet turns the answers into a decision. Ten minutes, five lines per offer, and every costume comes off.
Every offer can be reduced to two dollar figures
Strip any funding offer to the frame — revenue-based funding, a term loan, a line of credit draw, an equipment facility — and two numbers remain: the amount that actually arrives in your bank account, and the total number of dollars that will leave it before the obligation ends. Everything else on the page is presentation. Quoted rates cannot be compared across product types without a spreadsheet and a free afternoon. Dollars can be compared by anyone, instantly.
Total payback is the honest number precisely because it is the one an evasive offer avoids printing. A fixed, known total — this much in, this much back, agreed before anyone signs — is how we believe capital should be quoted, and it is the unit this worksheet forces every offer into.
The worksheet — five lines per offer, ten minutes total
- 1
Line 1: net funded
Write down what lands in your account after anything withheld at funding — origination, administrative, processing. Not the approval headline. If an offer deducts $4,500 on the way in, you are paying back money you never received, and the worksheet needs to know that.
- 2
Line 2: total payback
Every dollar that will leave your account across the whole term, as one number. If an offer cannot produce this figure in writing, stop comparing — that refusal is itself the finding.
- 3
Line 3: cost per netted dollar
Subtract line 1 from line 2, then divide by line 1. This is what each dollar you actually received costs you, in cents — the first number that is genuinely comparable across offers.
- 4
Line 4: cost per dollar, per month
Divide line 3 by the term in months. A short obligation and a long one can carry the same sticker cost at very different paces; this line puts offers of different lengths on the same clock.
- 5
Line 5: the payment
Amount and frequency — daily, weekly, or monthly. This line does not rank the offers. It decides whether the winner actually fits your deposits, which is a different question entirely.
A worked example — watch the biggest approval lose
Say an owner is holding three entirely hypothetical offers. Offer A approves $100,000 with nothing withheld and a total payback of $114,000 over twelve months, paid weekly. Offer B approves $125,000 — the biggest headline on the desk — but deducts $4,500 at funding, so $120,500 lands, against $150,000 of total payback over ten months, paid daily. Offer C approves $80,000 clean, with $88,800 of total payback over six months, paid monthly.
| Worksheet line | Offer A | Offer B | Offer C |
|---|---|---|---|
| Lands in your account | $100,000 | $120,500 | $80,000 |
| Total payback | $114,000 | $150,000 | $88,800 |
| Total cost | $14,000 | $29,500 | $8,800 |
| Cost per netted dollar | 14.0 cents | 24.5 cents | 11.0 cents |
| Term | 12 months | 10 months | 6 months |
| Cost per dollar, per month | about 1.2 cents | about 2.4 cents | about 1.8 cents |
| Payment | About $2,192 weekly | About $714 daily | $14,800 monthly |
Three verdicts, all true at once. Offer C is the cheapest in absolute terms — if the need genuinely ends in six months, the smallest total cost wins. Offer A carries the lowest pace of cost — for money doing ongoing work in the business, it is the best-priced dollar on the table. And Offer B, the one most owners would have taken because its first page shouted the biggest number, is the most expensive by every measure the worksheet can run.
The payment test decides what the arithmetic cannot
The per-dollar math ranks the offers; line 5 decides whether the ranking survives contact with your bank account. Convert each offer's payment to a weekly figure and set it against your average weekly deposits — then against your slowest recent month, not your best one. A payment that your thinnest stretch could not have carried is not a cheaper offer. It is a future problem with good pricing.
And if none of the three passes that test, the worksheet has produced its most valuable possible answer: none of the above. An obligation you cannot comfortably service is not made serviceable by being the least bad one on the desk. The same holds when the work the money would fund will not return more than the cost line — fairly priced capital is still the wrong tool if there is no return on the other side of it. Paying down what you already carry, or waiting a quarter until the numbers work, is sometimes the decision that keeps the business.
Collecting more offers is not better diligence
Here is where we will be direct about a piece of received wisdom. The standard advice — gather as many offers as possible — quietly costs more than it saves. Submitting your file to a dozen lenders at once marks it, industry-wide, as over-shopped, and over-shopped files read as higher risk — and a file that reads as risk gets quoted like one.
Comparing the offers already on your desk is diligence. Broadcasting your file to manufacture more of them is not. The stronger position is one application with one direct funder — a desk where the person quoting the deal is the one funding it, where the five lines arrive in writing without friction, and where your file is not resold down a chain. When every line of the worksheet is answered before you ask, the comparison tends to end quickly.
That is how we quote: net funded, total payback, the payment, the term — in plain language, before you sign, with one advisor who will walk the worksheet with you. Run our numbers through the same five lines as everyone else's. That is what the lines are for.
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Frequently asked questions
What is the fastest way to compare two business funding offers?
Convert both to dollars: the net amount that lands in your account and the total you will pay back. Subtract, divide the cost by the net, then divide by the term in months. Two offers of any product type become directly comparable in about two minutes each.
Is the offer with the lowest payment the cheapest?
Not necessarily. A small payment stretched over a long term can carry more total cost than a larger payment over a short one. The payment tells you whether an offer fits your cash flow; total payback and cost per dollar per month tell you what it costs.
Should I apply to more lenders so I have more offers to compare?
We would say no. Files submitted broadly read as over-shopped across the industry, which is treated as a risk signal and tends to be quoted accordingly. Compare what you hold, and prefer one application with one direct funder who answers all five worksheet lines in writing.
What if fees are deducted before the money arrives?
Then use the net figure — what actually lands — as the base for every calculation. Amounts withheld at funding raise your true cost, because you are paying back dollars you never received. Any offer that resists stating its net funded amount in writing has answered a different question for you.
Keep reading
Published by Express Capital Funding, a direct lender to U.S. small and mid-sized businesses. This article is general information, not financial, legal, or tax advice, and is not an offer or commitment to lend.
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