Most business funding offers are two to four pages of terms with the real economics scattered across them. Owners tend to read the amount and the rate, sign, and discover the rest later.
This is the order to read an offer in, and the questions to ask about each section before anything gets signed.
1. Total dollars repaid
Find the funded amount and the total repayment amount. Subtract one from the other. That difference is your true cost in dollars — the only number that compares cleanly across offers quoted as rates, factors or fees.
If the offer does not state a total repayment figure, ask for it in writing before continuing.
2. Payment amount and frequency
Convert the schedule into a weekly figure. Daily payments of $480 across 21 business days is roughly $10,000 a month leaving the account. Compare that against your slowest month's deposits, not your average.
3. Fees deducted at funding
- Origination or underwriting fee
- ACH or program fees charged per payment
- Wire and documentation fees
- Any broker or packaging fee
4. Prepayment terms
Ask directly: if I repay in month three instead of month nine, what do I owe? Some agreements discount the remaining cost substantially; others fix the full amount from day one. This clause can swing the real price by thousands of dollars.
5. Security and filings
Look for the personal guarantee, the UCC-1 filing language and any confession of judgment provision. Understand who is personally liable, what assets are claimed, and how the filing gets released after payoff.
6. Default and remedies
- What counts as default — missed payments, a bounced ACH, taking additional funding
- Whether default accelerates the full balance immediately
- Default interest or fee rates
- Whether cure periods exist and how long they are
7. The question to ask last
Ask your funding partner to explain, in plain English, what happens in a bad month. A partner who represents your business will answer that specifically. One who deflects to how quickly the money can arrive is telling you something important.
Frequently asked questions
- What is a confession of judgment?
- A clause allowing the funder to obtain a judgment without a full court process if you default. Restricted in some jurisdictions — read carefully and ask whether it applies.
- Should I have a lawyer review an offer?
- For anything six figures or with unusual clauses, yes. The review cost is small relative to the exposure.
- Can offer terms be negotiated?
- Frequently, yes — particularly payment frequency, term length and prepayment treatment. Competing offers give you leverage.