Reviewed 30 September 2026. General information, not advice.
Start with the money you receive
Write down how much actually reaches your business after any deductions. An arrangement fee taken from the advance means you may receive less than the headline loan amount. Ask whether fees are deducted, paid separately or added to the balance.
Compare the total repayable
Look at every repayment, upfront fee and final payment. Compare like-for-like amounts and terms, then ask for the total cost in pounds. A longer term may lower monthly repayments while increasing the overall interest.
Understand how the rate is expressed
An annual interest rate is not necessarily an APR. A flat rate may apply to the original advance, while a reducing-balance rate applies to the outstanding balance. Factor rates and monthly rates use different conventions. Multiplying a monthly rate by 12 does not, by itself, produce a reliable comparison.
Check flexibility and security
Can you overpay or repay early, and what would it cost? Is the rate fixed or variable? Does the lender require asset security or a personal guarantee? These terms can matter as much as the monthly figure.
Keep the decision connected to cash flow
Model a quieter month and a slower return on the investment. A lender’s approval does not guarantee that borrowing is the best decision for your business. Keep copies of offers and ask for anything unclear to be explained in writing.