How to compare business finance offers

Factor rates, monthly rates and annual rates are not the same thing. Compare on the rand you repay.

Compare the total repayable

Ask every finance house for the total amount you will repay, in rand, and the term. Divide the extra over the amount borrowed and the term, and you can compare any two offers fairly.

Watch the way the price is quoted

A factor rate of 1.2 on a six-month advance means repaying 20% more in six months, far more than 20% a year. A monthly rate of 3% is roughly 36% a year before fees.

Fees and settlement

Check initiation and monthly service fees, and whether settling early saves you anything. On some advances the full cost is fixed upfront, so settling early saves nothing.

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Next: Funding when your business is young

GoFund prepares and submits applications on your behalf; it is not a credit provider. Every amount, rate, turnaround and qualifying rule belongs to the finance house concerned, differs between them, and can change without notice. Only a finance house can approve credit.