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Comparing two offers when every number disagrees with the others

Two real $60,000 offers priced four different ways. One wins on total dollars, the other wins on rate, monthly strain and cost per month. Here is how to choose.

6 minute readUpdated 2026-07-29Written by the Exp Capital desk

Two offers for the same $60,000 will almost never be quoted on the same scale. One is a factor over six months, the other is a factor over twelve, the fees are different, and the payment frequencies do not match. Before you can pick, you have to rewrite both onto one line. Here is exactly how.

The uncomfortable part is that when you do the work properly, the offers often disagree with themselves. The cheaper offer in total dollars can be the more expensive one per month of use, and the one with the lower rate can be the one that costs you more overall. Both of those things are true in the worked example below.

Normalize four numbers first

Ignore everything on the term sheet except these four. Everything else is commentary until you have them.

Net proceeds: The dollars that actually land in your account, after every fee taken off the top. Not the approval amount.
Total payback: Every dollar that will leave your account, including per payment ACH fees if the deal charges them.
Term in calendar days: Not months, not business days. Days, so two different payment frequencies can be compared.
Payment and frequency: The exact dollar amount and how often. This is the affordability number, and it is separate from price.

With those four you can compute every metric that matters in under two minutes. Without them you are comparing marketing. If a term sheet is missing any of the four, see reading a term sheet before going further.

Two real offers on the same $60,000

Both of these are ordinary offers on the same file. Neither one is a trap. They are just structured differently, and the difference is worth roughly $11,000.

The same $60,000, normalized onto one scale
	Offer A	Offer B
Approved amount	$60,000	$60,000
Fees off the top	2 percent, $1,200	4 percent, $2,400
Net proceeds to you	$58,800	$57,600
Factor rate	1.18	1.34
Total payback	$70,800	$80,400
Payment	$544.62 per business day	$308.05 per business day
Payments and term	130 payments, about 6 months	261 payments, about 12 months
Monthly cash out	$11,818	$6,685
Total cost including fees	$12,000	$22,800
Approximate APR	76.4 percent	70.7 percent
Cost per $1,000 per month	$34.01	$32.99

Total dollars out the door, and the cash you actually receive

Four metrics, three different winners

This is the part nobody explains, so read it slowly. The four honest ways to score these offers do not agree, and each one is answering a different question.

Total dollars out the door. Offer A costs $12,000, Offer B costs $22,800. A wins by $10,800, and this is the only metric most owners ever look at. It answers: how much money will I have given up when this is over?
APR. A is 76.4 percent, B is 70.7 percent. B wins. This answers: which one charges more per dollar per unit of time? B costs more in total because you keep the money twice as long, not because it is priced worse.
Cost per $1,000 per month. A is $34.01, B is $32.99. B wins again, and by the same logic. This is the most intuitive version of APR and it is easy to compute: total cost, divided by net proceeds in thousands, divided by months.
Monthly cash strain. A takes $11,818 a month, B takes $6,685. B wins by a mile. This answers the only question that can actually end your business, which is whether you can pay it.

So A wins on the metric everyone checks and loses on the three that decide whether the deal works. That is not a coincidence. Short terms make the total dollar cost look small, which is precisely why they are quoted that way. See factor rate to APR for why a shorter term at the same price is a higher rate, not a lower one.

The renewal question, which decides it

Here is the test that settles most of these comparisons. Ask yourself honestly: in month seven, will I need capital again?

If the answer is no, Offer A is genuinely cheaper. You will have paid $12,000, you will be free in six months, and you will have $10,800 that Offer B's borrower does not have.

If the answer is yes, and for most businesses taking working capital the answer is yes, then A is not a six month deal. It is a six month deal followed by a renewal, which means another $1,200 of fees and another $10,800 of cost. Run it out to twelve months and A costs $24,000 against B's $22,800, with far more cash strain along the way.

Cumulative cost including fees, spread evenly across each term

The chart makes the trap visible. A looks cheaper right up until month seven, when the renewal fees reset and the line jumps above B and never comes back down. This is the single most common way owners overpay while believing they chose the cheap option.

The lines with no number on them

Once the arithmetic is done, two offers within a few points of each other are effectively tied on price, and the decision moves to terms. These are the ones that have actually changed our recommendation on real files.

Early payoff. A written discount schedule can be worth more than ten points of factor, because it turns a fixed cost into one you can shorten. Without it, paying early saves nothing. See prepayment and early payoff.
Reconciliation. Can you actually get the payment reduced in a bad month, what triggers it, and what do you have to submit? A right you cannot practically invoke is decoration.
Additional financing clause. If one offer permits an equipment loan later and the other makes it an event of default, that is a real constraint on the next twelve months of your business.
Guarantee scope. A performance guarantee and a full personal guarantee are one word apart in the document. Only one of them puts your house in the conversation.
Renewal policy in writing. Ask both funders what happens at 50 percent paid. A funder who will renew at the original factor is worth several points over one who reprices.
Who holds the paper. A funder who syndicates your deal across investors is harder to reach when you need reconciliation than one holding it on balance sheet.

The two minute worksheet

Do this for every offer, in this order, on one page. If the offers are within about five points of each other on line six, treat them as tied and decide on terms and cash flow instead.

Write down the net proceeds, not the approval amount.
Write down the total payback, including per payment fees.
Subtract: that is your true cost in dollars.
Write down the term in calendar days, and divide by 365 for the term in years.
Divide the cost by 55 percent of the net proceeds, then by the term in years. That is your approximate APR.
Divide the cost by the net proceeds in thousands, then by the term in months. That is your cost per $1,000 per month.
Divide the monthly payment into your free monthly cash. If it is above 60 percent, the offer is too big regardless of price.
Ask both funders the six questions on the term sheet page and compare the answers, not the offers.

The cheapest offer on paper and the offer you can survive are different offers more often than anyone selling one will tell you.

What we do with this

Exp Capital Solutions is a broker. We do not fund, price, or approve anything. When a file generates several offers, we rewrite every one onto the same page in the format above: net proceeds, total payback, cost, APR, cost per $1,000 per month, monthly debit against your free cash, and the three clauses most likely to matter. Then we tell you which one we would take and why, including when the answer is the smaller offer that pays us less, or a line of credit that pays us least of all. If you want to know what we earn on each option, ask. We will tell you, and it should be part of how you compare them. See broker versus direct lender.

Questions people actually ask

How do I compare a factor rate offer to an interest rate offer?

Convert both to cost per $1,000 per month. Take the total cost in dollars, divide by the net proceeds in thousands, then divide by the term in months. That single figure works across factor rates, interest rates, discount rates and fee structures, and it takes about thirty seconds per offer.

Is the offer with the lower total cost always better?

No. A shorter term always produces a smaller total dollar cost at the same price, so the total is partly measuring how long you keep the money rather than how much it costs. Compare on APR or cost per $1,000 per month, then check whether you can actually afford the monthly payment.

What is a reasonable percentage of my revenue to spend on a payment?

Measure it against free cash, not revenue. If the monthly payment exceeds about 60 percent of what the business genuinely has left after all operating costs and owner draw, the offer is too large regardless of the rate. Above 80 percent, one slow week produces an NSF.

Should I take the offer with the longer term?

Usually yes if the cost per $1,000 per month is similar, because a longer term with a smaller payment leaves room to survive a bad month. Take the shorter term only when you are confident you will not need capital again at the end of it, since a renewal resets the fees and wipes out the savings.

Do two funders looking at my file hurt my credit?

Working capital and advance applications usually run a soft pull at first, so shopping a file is low cost. What does hurt is a shotgun submission to a dozen shops at once, which is visible through shared submission platforms and tends to produce worse pricing, not better. Two to four well matched submissions is the useful range.

What if both offers are almost identical on price?

Then price is settled and the decision is terms. Compare the early payoff discount, the reconciliation trigger, whether additional financing is permitted, the scope of the personal guarantee, and the funder's stated renewal policy at 50 percent paid. Those differences are frequently worth more than a few points of factor.

Can I use one offer to negotiate the other down?

Yes, on the fee lines. Origination fees, underwriting fees and wire fees move when a competing term sheet is on the table. The factor itself rarely moves, because it comes out of the funder's credit box rather than a price list, so pushing hard on the rate usually just costs you a day.

Keep reading

Factor rate to APRThe conversion every comparison depends on.Reading a term sheetThe six numbers you need before you can compare anything.Total cost of capitalThe fees and renewals that never reach the headline.Broker versus direct lenderWho is paid what on each offer in front of you.