Why Do Two Funders Price the Same MCA So Differently?
Because each funder reads risk in its own way and has its own costs, appetite and rules for your industry. The same file can look strong to one funder and ordinary to another, and broker commissions and fees add further differences.
What drives a funder's price?
- How it weighs your industry, time in business and credit.
- How it reads your deposits, balances and any returned payments.
- Its own cost of money, which differs from funder to funder.
- How much business it wants right now in your size range.
- Its experience with files like yours.
How does position change the price?
A first position advance usually gets better pricing than a second or third, because the funder is first in line. If you already have an advance, a new funder prices the extra risk of stacking.
How do fees change the picture?
Two offers with the same factor rate can cost different amounts once fees are included. Always compare net funding and total payback.
Do broker commissions affect the price?
Brokers are paid by funders, and the commission is built into the offer. Different brokers pushing different commissions can make the same funder's offer look different. We disclose how we're paid: the funder pays our commission on funding, and it's in the paperwork.
Does timing change the price?
Funders adjust their appetite over time. A funder that was aggressive last month turns conservative this month, and the reverse happens too. Shopping the file to several funders at once captures whoever's pricing best right now.
How do you compare fairly?
Line up net funding, total payback, payment, term, fees, early payoff terms and reconciliation terms. The cheapest looking factor rate isn't always the best offer once you see the whole picture.
Why does Afterfirst shop several funders?
This is the core of what we do. We send your file to funders whose appetite fits it and bring back the offers side by side, so you pick based on the whole picture.
How do credit and time in business change pricing?
Credit scores and time in business matter more to some funders than others. One funder prices a younger business sharply higher, while another cares mostly about deposits. Knowing which funder weighs what is part of why a broker can place a file better than an owner shopping alone.
Which terms matter besides price?
Reconciliation terms, early payoff discounts, payment frequency and how the funder treats you when things go wrong all matter. A slightly higher price from a funder with a fair reconciliation process can be the better deal.
What if two offers are close?
If two offers are within a small margin, pick the one with the friendlier terms and the funder you trust more.
How can Afterfirst help with this?
Call 877-FUND-654 and send your statements. We'll shop your file with funders in our network and show you why the offers differ, so you can pick with confidence.
What else do owners ask about this?
- Is an MCA factor rate monthly or for the whole advance?
- Is an MCA renewal cheaper than the first advance?
- Why is the estimated APR on my MCA so high?
More short answers on this topic are on the cost FAQ, and the factor rate calculator runs the numbers for your own file.
Have a question we didn't answer?
Ask us on the call. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.