How to compare the loan offers your broker brings

Compare offers on five numbers: the cash you actually receive, the total you will repay, the total dollar cost, the APR, and the payment you will make each week or month. Then check the terms behind them: prepayment rules, collateral, personal guarantee and fees. Put every offer in one table and the right choice is usually obvious.

Your broker should help you build that table. Here is how to do it yourself, with a worked example.

The five numbers that matter

1. Cash received. The amount that lands in your account after any fees withheld at funding. This is the money you can actually use.
2. Total repayment. Every payment added together, including fees.
3. Total dollar cost. Total repayment minus cash received. This is what the money costs you.
4. APR. The yearly cost of the money, including fees, as a percentage. It lets you compare a 6-month advance with a 3-year loan on equal terms. See APR vs factor rate.
5. Payment amount and frequency. Daily, weekly or monthly, fixed or a share of sales. This decides whether you can comfortably carry the debt.

Many states now require providers to put most of these on paper. New York's Commercial Finance Disclosure Law requires providers to disclose the finance charge, the APR, total repayment and the amount and frequency of payments on offers of $2.5 million or less. California's rules, effective December 9, 2022, require an APR for loans, lines, factoring and merchant cash advances. Virginia's sales-based financing law requires the disbursement amount after withheld fees, the finance charge, the total repayment amount and the estimated number of payments.

A worked example: three offers for $100,000

Say your broker brings back three offers for a $100,000 need.

• Offer A, online term loan: 24 months, 18% interest, 2% origination fee withheld at funding.
• Offer B, merchant cash advance: factor rate 1.3, repaid by fixed daily debit over about 9 months (189 business days).
• Offer C, bank term loan: 36 months, 14% interest, 3% origination fee withheld at funding.

How the numbers work:

• Offer A: a $100,000 loan at 18% over 24 months has a payment of $4,992.41. Twenty-four payments total $119,817.84. You received $98,000, so the cost is $21,817.84. Solving for the rate that turns $98,000 into those 24 payments gives an APR of 20.1%.
• Offer B: $100,000 times 1.3 is $130,000. Spread over 189 business days that is $687.83 a day. The cost is $30,000. Because you repay quickly and every day, the APR is 73.0%. About 21 business days a month makes roughly $14,444 a month leaving your account.
• Offer C: $100,000 at 14% over 36 months is $3,417.76 a month. Thirty-six payments total $123,039.47. You received $97,000, so the cost is $26,039.47 and the APR is 16.2%.

What the example teaches

The lowest APR is not the lowest dollar cost. Offer C has the best APR, yet Offer A costs about $4,200 less in total because you pay it off a year sooner. If you would rather keep cash in the business each month, C wins. If you want the least total spend, A wins.

Payment size decides survivability. Offer B puts about $14,444 a month through your account. If your monthly free cash flow is $10,000, B will strain you no matter how fast it funds. If you need money tomorrow and have strong card sales, B may still be the right tool for a short, specific need.

Speed has a price. The fastest money is usually the most expensive. Price that speed honestly: is funding in two days instead of three weeks worth the extra $8,000 to $10,000?

The Federal Reserve's 2025 Small Business Credit Survey found that 60% of firms that borrowed from online lenders reported higher than expected borrowing costs. A table like this one is the simplest way to avoid that surprise.

The terms behind the numbers

Two offers with the same cost can still be very different deals. Check:

How your broker should present offers

A professional broker shows you every offer that came back, including the ones they do not recommend, and walks you through the lender's own disclosure. They explain why they favour one. They give you time to decide. NerdWallet notes a few days to consider an offer is typical.

Be careful with a broker who will not show you the lender's offer document, only a summary, or who insists you sign the same day. Those are specific behaviours worth walking away from. Verified entries on the register show fees in writing, so you know how your broker is paid before offers arrive.

Build your own comparison

1. Ask your broker for each lender's written offer or disclosure, not a screenshot.
2. Fill in the five numbers for each.
3. Mark your maximum comfortable payment and cross out anything above it.
4. From what remains, pick on total cost, unless speed or flexibility is worth more to you.
5. Ask whether the winning lender will improve price or terms. Brokers often can. Read negotiating fees and terms.

If you want offers from brokers who compete for your deal, start with the match form.