Guide

Can you negotiate a factor rate or the terms of an advance?

Yes, within the grade your file was given. The factor itself moves a few points — 1.32 to 1.28 — more readily on larger amounts and repeat business. What moves more: the term, weekly instead of daily payments, the origination fee, an early-payment discount, the reconciliation clause, and taking less than the full offer. The strongest lever is a competing written offer. Everything is negotiable before signing and almost nothing after.

What moves, and how much

The factor: a few points, especially on amounts over $50,000 or for a customer the funder wants to keep. A funder pricing a file at 1.32 can often write 1.28; it will not write 1.15 for a C file, because the grade is the grade.

The term: often. A six-month offer can frequently be written at nine or twelve, at a slightly higher factor and a much smaller payment.

Payment frequency: weekly instead of daily is available at most funders simply for asking, and it costs nothing.

Fees: origination fees are reduced or waived more often than factors are cut. Ask for the fee and the factor together and let the funder choose which to move.

Early-payment discount: a clause that reduces the total if you repay inside a set window. Not standard, often granted, and worth real money to a business expecting a draw or a check.

The reconciliation clause: shall versus may. Ask for shall.

The amount: taking less than the offer usually improves the factor, because the payment-to-balance ratio improves.

The lever that works

A competing written offer. Funders price against each other and a term sheet from another shop is the one document that moves a factor more than a few points. This is the practical reason to apply through a marketplace that returns several offers rather than to one funder: the negotiation is built in. Two offers on the table and a polite question — can you meet this — is the whole technique.

Cost of $50,000, by product

BANK TERM LOAN60 months · hardest to qualify for$13,700SBA 7(A)120 months · lowest monthly, slowest$34,200ONLINE TERM LOAN18 months · days, not months$11,500LINE OF CREDIT12 months · pay only on what you draw$7,400MERCHANT CASH ADVANCE9 months · fastest, no score floor$15,000$0$36,000
Total cost of capital on a $50,000 facility, with the term stated on every bar — a comparison that hides the term is not a comparison. An advance is the most expensive money here and the only one that reaches a business the bank has already declined. Illustrative figures at mid-range pricing, not an offer.

What does not move, and when to stop

The grade. A funder will not price a C file as an A because you asked. The personal guarantee: nearly universal and rarely removed. And nothing moves after signing; a contract is the negotiation's end, not its start.

Stop when the offer is inside the range for your grade, the payment fits the account, and the funder has put every number on one page. A better factor on a worse contract is not a win.

Sources

Related questions.

Will negotiating make the funder pull the offer?
No. Asking for weekly payments, a longer term or a fee reduction is routine. Funders expect it and price with room for it.
Does a broker negotiate for me?
A good one does, and is paid by the funder to place the deal, so the incentive is to close it — sometimes at a price that suits the closing more than you. Ask the broker what the funder's best factor for your grade is. The answer tells you about the broker.
Can I negotiate a renewal?
More than a first advance, because the funder has your history. Ask whether the renewal charges a new factor on the old balance; if it does, that is the term to negotiate first. See the renewal guide.

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