Cost
Factor rates, multiples and APRs cannot be compared directly. Total payback in dollars and the repayment period can.
✓ Checking what you qualify for does not affect your credit score.
Put each offer on one line: amount received, total to repay, repayment period, payment and fees. Then compare.
| MCA 1.25 | RBF 1.20 | Term loan 14% APR | |
|---|---|---|---|
| Amount received | $50,000 | $50,000 | $50,000 |
| Total to repay | $62,500 | $60,000 | About $55,800 over 12 months |
| Period | About 6 months | About 8–12 months | 12 months |
| Payment | ~$496/day | % of revenue | ~$4,650/month |
The term loan is cheapest in dollars, but it is also the hardest to qualify for and the slowest. The advance costs more and is faster and easier to qualify for. Which wins depends on what the speed is worth to you.
Cost is not only dollars. A cheaper loan that arrives after the opportunity has passed has a cost, and so does an advance that is dearer but lands the day you need it. Put a value on the days: a supplier discount that expires on Friday, a contract that requires a deposit next week. That value belongs on the comparison table beside the dollars.
A useful habit is to write the cost of delay as a number, even a rough one, before comparing offers.
The costliest outcome is a payment the business cannot carry. Missed debits bring fees, and a default clause can accelerate the whole balance. A slightly higher total with a structure that fits is cheaper than a lower total that causes a crisis. Run the payment against your slowest month before judging price.
Not if the term is long or fees are deducted. Always compare the total you repay against the amount you receive.
Some agreements include origination or administration fees, often deducted from the amount. Ask for the net funded amount.
Use the MCA vs loan calculator to put both on one total-cost line.
Educational information only. It is not legal, tax or accounting advice.
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