How a file is graded
Most funders use a paper grade, A through D, and the grade decides the amount, the term and the factor together. What moves a file down: fewer than a year in business; deposits that swing month to month; a low average daily balance relative to the proposed payment; more than a few returned items in ninety days; negative-balance days; an existing advance being serviced; a falling trend across the months; a lower-margin or higher-risk industry. What moves it up is the reverse, plus a personal score that is merely not bad.
An A file might be offered 1.18 over twelve months for one and a half times its monthly deposits. The same amount for a C file might be 1.38 over six months for three-quarters of its deposits. The advertised 1.18 was real. It was just not for that file.
What is and is not a red flag
A worse-than-advertised offer that comes with a reason — three NSFs in the last quarter, an existing position, eight months in business — is the market working. Ask what would move the file up a grade; the answer is usually one clean quarter and it is worth having.
An offer that changes at the closing table, a factor that is higher on the contract than on the term sheet, fees that appear at funding, or a funder that cannot say why the price moved: those are the signs to walk away from. In a dozen states the disclosure law requires the final terms in a standard form before signing; anywhere, you can insist on the same.
Improving the grade before the next application
Ninety clean days moves most files a grade: no returned items, no negative days, a cushion in the account, all cash deposited. Clearing an existing advance moves it another. Twelve months in business, then twenty-four, each open better pricing. A first advance repaid on schedule is the fastest route to A-grade pricing on the second, and it is why starting smaller than the offer is often the cheaper path over a year.