Compare the Whole Offer, Not the Headline

1. Establish the usable amount

Record the gross funding amount and subtract every deduction: origination or underwriting charges, broker or administrative fees, payoffs, vendor disbursements, and required reserves. The result is the net amount available for your intended purpose.

If a funder pays a vendor directly, compare the vendor invoice with the disbursed amount. If an existing obligation is paid off, obtain its payoff statement and confirm whether any remaining balance is your responsibility.

2. Calculate total dollar cost

For a loan, use the payment schedule and disclosed charges to determine total payments and cost. For a factor-based product, calculate the base purchased or repayment amount and add fees not already included. Record any cost that depends on how long the obligation remains outstanding.

Do not compare a factor rate directly with an interest rate. If an APR or estimated APR is supplied, review its assumptions. Always retain the total-dollar comparison and the expected duration alongside any annualized figure.

3. Put every payment on one calendar

Convert daily, weekly, biweekly, and monthly payments into a common cash-flow calendar without hiding their actual due dates. Include bank holidays and the number of business days in each month. Add payroll, rent, taxes, insurance, suppliers, and current financing obligations.

Then create a conservative scenario: lower sales, slower customer collections, or an unexpected repair. Identify the first week in which cash becomes tight. A financing option that works only under ideal collections deserves reconsideration.

4. Read flexibility and exit terms

• Does early payment reduce the obligation, and under what conditions?
• Can payments be reconciled or adjusted, or is any relief discretionary?
• Does the interest rate or payment change over time?
• Is there a balloon, residual, buyout, or final lump sum?
• Are there minimum draws, monthly fees, or prepayment charges?
• What happens at renewal, and how much new cash would you actually receive?

Do not assume a verbal promise modifies the agreement. Request any material clarification in the written documents.

5. Review the protections you are giving

Identify collateral, security interests, personal guaranties, account-control arrangements, and reporting obligations. Read the default section, including cross-defaults to other financing, misrepresentation, insufficient receivables, or a material adverse change.

For invoice arrangements, determine who notifies and collects from customers and whether recourse applies. For equipment, confirm end-of-term ownership and maintenance responsibilities. For SBA-backed loans, use the official program documents and lender disclosures.

6. Make the final side-by-side decision

The best choice may be a smaller request, a different structure, or no financing now. If you want to discuss the options presented to you, contact Synergy Capital. Bring the documents, not just the quote summary.