Start with net proceeds
List the approved amount, origination fees, broker fees, closing costs, required deposits, and any prior balance being paid off. The number that matters for the project is the cash the business can actually use. If an offer refinances another obligation, separate new money from the payoff so the owner does not overestimate available working capital.
Convert cost into dollars
Ask for the total amount expected to be repaid under the scheduled terms. Rates, factor rates, and fees are difficult to compare until they become dollars and dates. An annual percentage rate can help for products that provide one, but commercial agreements can use different pricing methods. The written agreement controls.
Model the payment against cash flow
Place every proposed daily, weekly, or monthly payment into a conservative cash-flow forecast. Include payroll, taxes, rent, vendors, existing debt, and a slower revenue case. A lower total cost can still be unworkable if payment timing conflicts with collections.
Review collateral and guarantees
Identify personal guarantees, blanket liens, equipment liens, receivables assignments, deposit-account control, and default remedies. Unsecured marketing language may still accompany a personal guarantee or UCC filing. Ask counsel to review provisions the owner does not understand.
Compare flexibility and exit terms
Renewal, prepayment, reconciliation, draw access, late charges, covenants, and payoff procedures affect real-world value. Owners should choose the structure the business can support under reasonable downside conditions, not the one presented with the most urgency.