Interest
Interest on a business loan behaves differently from interest on a mortgage or a card, and differently again from a factor rate. The mechanics decide what you pay far more than the headline number does.
✓ Checking what you qualify for does not affect your credit score.
This is the single most expensive misunderstanding in business funding. The full comparison →
Take $50,000 at 1% a month. Drawn and repaid evenly over twelve months, the interest lands near $3,300, because the balance you are paying on falls every month.
Hold that same $50,000 for the full twelve months without repaying, and the interest is closer to $6,000. Same rate, nearly double the cost, decided entirely by how you use the facility.
That is why a line of credit suits uneven needs and a term loan suits a defined one. Drawing money you do not need yet is the most common way businesses pay more than they had to.
Rate is set by the strength of the file, and the inputs are the same ones used for eligibility.
A short application. No impact to your credit score to see what you qualify for.
We review revenue, time in business and bank activity — not just a credit score.
You see the amount, the term and the total cost before you sign anything.
Money in your account, typically the next business day after signing.
Lenders and brokers quote cost in at least four ways. Before comparing offers, convert each one into dollars over the time you will actually hold the money.
| Quote style | Example | What to ask |
|---|---|---|
| Annual rate | “From 4.8% to 24.99%” | Is it simple or amortizing interest, and over what term? |
| Monthly rate | “From 1% per month” | Roughly 12% a year before fees; what fees apply? |
| Factor or percentage | “Factor 1.15 to 1.49” or “15% to 49%” | What is the term? A short term makes a low factor expensive per year. |
| Fee per draw | “2.49% per draw” | Is it charged on each draw only, or also to open or maintain? |
A 1% monthly rate on a balance you repay over 12 months costs about 6.6% of the original amount in total interest, because the balance falls as you pay. A 1.15 factor costs 15% of the advance no matter how fast it is collected. Collected in 30 days, that factor costs far more per year than any of the rates above; collected over 12 months, it is in a similar range.
Illustrative arithmetic: $25,000 at 1% a month over 12 months is $1,654.64 of interest, about 6.6%.
Put every quote through the offer comparison worksheet, which works in dollars and as a share of your deposits.
Ours start at 1% per month on a line of credit. Rates across the market vary enormously by product; OnDeck publishes an average of 53.2% APR on its term loans.
On a line of credit, no — only on what you have drawn and not yet repaid. On a factor-rate advance the cost is set on the full amount at funding.
On an interest-bearing product, always. Our term loan goes further with a 50% discount on remaining interest for a full early payoff.
A mortgage is secured against property. Unsecured business funding is priced on revenue and bank activity with no asset behind it.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
