An offer letter in your inbox feels like the finish line. Someone looked at your bank statements, said yes, and put a number on the page. Most owners sign within a day or two, because the money is needed and shopping around sounds like another week of paperwork. That first offer, though, is one funder's price for your file on one particular day, and it is rarely the only price available.
The Federal Reserve's 2026 Small Business Credit Survey found that 60% of businesses that borrowed from online lenders said the cost turned out higher than they expected, while only 4% said it came in lower. We see the same pattern from our side of the desk: owners who signed the first offer they got, then learned months later that another funder would have taken the same file at a better price.
So before you sign, send the offer to us. We take your offer letter, with one short application, to the funders in our network and ask them to beat it. Sometimes the better offer comes from a different funder, and sometimes it comes from the same one that sent you the first letter. The rest of this post explains how the two most common products work, what to read on the letter you already have, and why a broker with the right relationships can move the numbers.
How revenue-based financing works
Revenue-based financing is what most funders call a merchant cash advance, or MCA, and it is not a loan in the legal sense. The funder buys a slice of your future sales at a discount. It pays you a lump sum now, called the purchase price, and in return collects a larger fixed amount, called the purchased amount, as your customers pay you. Repayment comes out as a set share of your deposits, usually by daily or weekly ACH debit, until that fixed total has been collected, and then it ends.
The price of an advance is expressed as a factor rate. A factor rate of 1.35 on a $40,000 advance means you pay back $54,000, and that total stays the same whether you clear it in four months or nine. This is why a factor rate is hard to compare with the interest rate on a bank loan. The faster you repay, the higher the equivalent annual cost, because you paid the same dollars over less time. New York's commercial finance disclosure rule makes funders show an estimated APR on sales-based financing and state plainly that it is not an interest rate (23 NYCRR 600), and California requires a similar disclosure under its commercial financing rules.
The share of sales the funder takes is called the specified percentage, or holdback. Many funders set a fixed daily or weekly payment that estimates that share, then true it up later. That true-up is called reconciliation. If your sales drop and the payment does not, reconciliation is how you ask to have the payment lowered to match. An advance that promises reconciliation but makes it hard to use behaves a lot like a fixed loan. In 2025 the New York Attorney General announced a $1.065 billion judgment against a funder whose contracts promised reconciliation that, according to the Attorney General, it almost never honored.
Advances suit businesses with steady deposits that need money quickly for a known purpose, such as stock for a busy season, an equipment repair or the deposit on a large job. Our revenue-based financing page covers amounts, timing and the kinds of businesses it fits best.
How a business line of credit works
A line of credit works differently. The funder approves a limit, say $100,000, and you draw against it as needs come up. You repay what you drew on a set schedule, and as you repay, that room becomes available again without a new application. The part of the limit you never touch costs little or nothing. The U.S. Small Business Administration describes the same principle for the lines its lenders make, where interest is charged only while the money is in use.
Lines that come through brokers like us are often built around revenue rather than collateral. They usually repay weekly rather than daily, and some cut the fee substantially if you pay a draw off early. A line fits costs that keep coming back, like a supplier invoice that is due before your own customers pay, payroll in a quiet month, or materials for the next job. An advance fits one known need. If you are holding an offer for an advance but your real problem is uneven cash flow, the better offer may be a different product altogether. Our line of credit page explains limits, draws and repayment in more detail.
Both products are common. According to the same Fed survey, 24% of employer firms applied for a line of credit in 2025 and 8% applied for a merchant cash advance. Advance applicants were denied less often than line of credit applicants, 12% of the time against 24%, which is part of why so many owners end up holding an MCA offer within days and feel pressure to take it.
How to read the offer letter you already have
Before anyone can beat an offer, you need to know what it says. Offer letters vary by funder, and some use different names for the same figure, but nearly all of them contain the lines below.
| Line on the offer | What it tells you | What to check |
|---|---|---|
| Purchase price or amount funded | What the funder pays for your future receivables | Whether fees come off before the money reaches you |
| Origination and other fees | Charges deducted at funding | The net amount that actually lands in your account |
| Purchased amount or total repayment | Everything you will pay back | This is the figure to compare across offers, because it includes the cost |
| Factor rate | The purchased amount divided by the purchase price | On the same amount, a lower factor rate is cheaper |
| Specified percentage or holdback | The share of receipts being sold | Whether the fixed payment really matches that share |
| Payment and frequency | The debit amount and how often it runs | Daily debits weigh more on cash flow than weekly ones |
| Estimated term | How long repayment should take | A short term makes even a modest factor rate expensive on an annual basis |
| Early payoff | Whether paying early lowers what you owe | Without a discount, paying early saves you nothing |
| Reconciliation | Your right to have payments adjusted to sales | Who decides, how quickly, and what you have to send |
Ten states, including New York, California, Texas, Florida, Georgia and Virginia, now require providers to put many of these figures in a standard disclosure before you sign, and the law firm Venable keeps a current summary of the state rules. If your offer came with that disclosure, it is the most useful page to send us, because it shows the estimated APR, the finance charge and the payment terms in one place.
Two more things deserve a careful look. The first is renewals. If a new offer pays off an advance you still have open, ask whether you are being charged again on a balance that already carried a fee. New York's disclosure calls this double dipping and requires funders to answer yes or no. The second is stacking, which means taking a second or third advance on top of one you are still repaying. Each new position adds another debit to the same bank account, and offers for a second position are usually priced higher because that funder sits behind the first one.
The Fed survey also asked owners what went wrong with online lenders. 61% pointed to a high interest rate, 38% to unfavorable repayment terms, and 16% said the cost or terms were not clearly described up front. Reading the letter line by line takes care of the third problem. The first two are where negotiation comes in.
Can you negotiate a merchant cash advance offer?
Yes, and it happens more often than most owners think. A funder's offer reflects what it thinks of your file and what it expects you to accept. When a funder knows another funder has already approved you, and knows the exact number it has to beat, it has a reason to sharpen its price. Funders also differ in what they want. One may be cautious about your industry while another is actively looking for restaurant or trucking files. One may price a business with two years of history the same as one with ten, while another gives real weight to the longer track record.
Almost every line on the letter can move. The amount can go up when a funder reads your deposits more generously. The factor rate can come down, the term can stretch so that each payment is smaller, and a daily debit can become a weekly one. Fees can shrink, and an early payoff discount can appear where there was none. The cheapest offer is not automatically the best one, either. A slightly higher cost with weekly payments and a real early payoff discount can leave a seasonal business in far better shape than the cheapest daily offer.
Negotiating on your own is hard, because a funder talking to one owner has little reason to believe there is a competing offer worth matching. A broker who sends that funder complete files every week is in a very different position.
Why we can get you a better offer
Today Capital Group has been placing business funding for a long time, and over those years we have built working relationships with the funders in our network. They know our files are complete and our clients are real, operating businesses, so they take our calls and they let us negotiate. When we send your application with your offer attached, the funder sees two things at once: a file that is ready to fund, and the number it needs to beat.
The better offer can come from either direction. Sometimes it comes from a funder you have never heard of that likes your industry more than the first one did. Sometimes it comes from the very funder that sent your first letter, because a funder that has already approved you would usually rather improve its terms than lose the deal, and a broker can ask for that in a way a single owner rarely can.
We also read the terms with you before anything gets signed. Every offer we bring back is laid out the same way, so you can compare the total payback, the payment, the frequency and the early payoff terms without decoding three different letters. If the offer you already hold turns out to be the best one available, we will tell you that as well, and you will have lost nothing by checking. There is no obligation, and nothing to pay to find out.
How to send us your offer
- Start the application and answer yes when it asks whether you already have an offer. Upload the offer letter as a photo, a screenshot or a PDF, and include the state disclosure page if the funder gave you one.
- Answer the same short questions every applicant answers about revenue, time in business and what the money is for, then add your last four months of business bank statements on our secure page.
- We take your file and your offer to the funders in our network and bring back what they offer, side by side with the one you already have. You choose which to sign, or you sign nothing at all.
Offers expire, and funders want to see one that is still open, so send yours as soon as you have it. If yours has already lapsed, apply anyway and we will start from the beginning. If you would rather talk it through first, call us at (818) 351-0225 or send our team a message, and someone will go through your offer with you.
Send us your offer and we will get to work on beating it. You can read more about how the process works on our beat my offer page.
Questions business owners ask about MCA offers
Can you negotiate a merchant cash advance?
Yes. The amount, factor rate, term, payment frequency, fees and early payoff terms can all change before you sign. Funders move the most when they know a competing approval exists, which is why we send your offer along with your application.
Are merchant cash advances legal?
Yes. A merchant cash advance is structured as a purchase of future receivables rather than a loan, which is why it carries a fixed total instead of an interest rate. Courts look closely at contracts where repayment does not truly depend on sales, and regulators have acted against funders that abused the structure, as in the FTC's case against RCG Advances. Ten states now require cost disclosures before you sign, and a business attorney can review a specific contract for you.
Does applying hurt my credit score?
Applying through us does not involve a hard credit check. Revenue-based funders rely mostly on bank statements, and when they check personal credit it is often a soft inquiry, as Nav explains. A soft inquiry does not affect your score.
Can I get an SBA loan if I already have an MCA?
It is possible. An SBA lender looks at whether your cash flow can cover the new payment alongside what you already owe, so an open advance makes approval harder without ruling it out. Some owners move to an SBA or bank loan once their business qualifies, and our SBA and bank loans page lists what those lenders ask for.
What if I already signed and the payments are too heavy?
Once an advance is funded, the conversation turns to refinancing or consolidation. We can look at whether one new facility with a lower combined payment makes sense for your business, and our consolidation page explains how that works.
Does it cost anything to have you look at my offer?
No. There is no charge to send us your offer and see what comes back, and you are under no obligation to accept anything we bring you.
For more on how funding decisions get made, read From application to funded: what actually happens and Why business owners are rethinking short-term funding.
