Send me your advance contracts. I will tell you the truth about them.
Including when the truth is that you already have the best deal available to you and should leave it alone.
Email my contracts Text me instead Run your own numbersYour funding agreements and three months of bank statements. Email them or text me. I read them myself and I answer you personally.
What I get out of this
I am a funding broker. When I place a deal, the funder pays me. That is how I make my living, and it means I have a reason to want you to take financing.
So here is the rule. If you qualify for something better, I will tell you what it is and why. If you do not, I will tell you what is blocking you. And if what you already have beats anything I could put in front of you, I will tell you that, and you will owe me nothing.
I would rather be the person you call in six months than the person who cost you money today.
The money you never actually receive
Nearly every advance carries an origination or underwriting fee, taken out before the money reaches your account. It runs anywhere from 2% to 10%. Five is about average.
Here is the part that gets missed. The fee comes out of what you receive, but the factor rate is charged on the full amount. Same deal as above, with the fee added:
| Origination fee | You receive | You repay | Annualised |
|---|---|---|---|
| None | $50,000 | $71,000 | ~99% |
| 2% | $49,000 | $71,000 | ~105% |
| 5% | $47,500 | $71,000 | ~115% |
| 10% | $45,000 | $71,000 | ~132% |
You repay $71,000 in every row. Same advance, same factor rate, same daily payment. The fee is the only thing that changed.
A 5% fee does not cost you 5%. It costs you the $2,500, plus the factor rate on $2,500 you never had. That is why the annualised number moves sixteen points on a fee most people treat as paperwork.
Your contract says 1.42. It does not say 99%.
Both describe the same deal. An advance quotes a factor rate — a multiplier, not an interest rate. The two are not comparable. Written out in full:
Annualised, that is roughly 99%. It is an estimate, because an advance has no stated APR and the term moves with your receipts. Paying it off early does not reduce what you owe.
Then there is the broker fee sheet
Separate from the origination fee, some brokers will hand you a fee sheet of their own — a percentage payable to them, charged to you, on top of the origination fee and on top of the commission the funder is already paying them for the same deal.
Look again at what I told you at the top of this page. The funder pays me when I place a deal. Anyone putting a fee sheet in front of you is getting paid twice on one transaction: once by the funder, once by you.
Ask what that fee buys you that the funder's commission does not already cover. I have yet to hear an answer that holds up.
Do any of these sound familiar?
None of these is automatically a lie. Some are true some of the time. But if the person saying it has not put it in writing, here is what it usually means.
“We just need to build a relationship first.”
There is no relationship. There is a contract. This is how you get talked into worse terms today in exchange for a better deal later that nobody has actually promised you.
Ask: what improves, by how much, and on what date — in writing?
“We need to see some payment history on this one.”
Payment history decides whether a funder will approve you. It does not set your price. Price comes off the health of your bank statements and your credit score. There are funders who specifically like a merchant who has carried advances before, and they will still put you between 1.40 and 1.50.
Ask: which of my numbers moves the price, and by how much?
“In 30 days we can refinance this into a better rate and term.”
A better rate comes from better bank statements or a better credit score, not from thirty days going by. What is usually available at 30 days is a renewal, and in a renewal the unpaid cost of the current advance gets rolled into the new one. The daily payment can drop while the total you repay goes up.
Ask: what is the total repayment on the new deal, against the balance left on this one?
“Once you are halfway through, we will come in with a line of credit or a term loan on monthly payments.”
Term loans and lines of credit are underwritten on criteria that open advance positions usually disqualify you from. Taking the advance can move you further from the thing you were promised, not closer.
Ask: which lender, what are their criteria, and does an open position disqualify me?
If you are hearing these right now, send me what you were sent. I will tell you which parts hold up.
Why I ask for the contracts, not just the statements
Statements show me what is leaving your account. The contracts show me what you actually agreed to: the reconciliation clause, the personal guarantee, what happens if you ask to slow the payments down, whether early payoff does anything at all.
Two merchants with identical daily debits can be in completely different positions, and no bank statement will tell you which. Most people who called you never asked for the contracts. That is part of why you have heard so much that was not true.
I read them, I write back, and that is the end of it unless you ask for more.
What is actually out there
A handful of real options. Every one has a catch, and anyone showing you only the upside is selling it to you.
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Finish what you have.
If the term is nearly done and the business is covering the debits, this is often the cheapest thing you can do.
The catch: one slow month forces a decision on worse terms.
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Renewal with your current funder.
They pay off the balance and advance new money.
The catch: the unpaid cost of the old advance gets rolled into the new one. You pay a factor rate on money you already paid for.
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Consolidation.
Several positions replaced by one longer, lower payment.
The catch: a smaller daily number can still cost more in total. Compare total repayment, never the daily.
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Term loan, line of credit, or SBA.
If you qualify, the cost is a fraction of an advance.
The catch: qualifying is the whole problem, and open positions are usually what disqualifies you.
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Negotiating with the funder you have.
Some will reduce or pause payments for a business that talks to them rather than defaulting.
The catch: nothing obligates them to agree.
Send the contracts.
Whatever you decide next, you will decide it better knowing what you are actually in. That part costs you nothing.
Email my contracts Text me instead Run your own numbers