Is the renewal offer worth it?

What this tells you

A renewal offer often leads with a big number. The old balance and any fees come out of it first, so the cash you receive is smaller than the headline.

This page shows the cash that lands, the new total you would owe, and the cost of that new cash. That cost is worked out after the old balance is taken off, so you see the price of what you actually receive.

The percentage at the end is the cost divided by the new cash. It is a quick way to compare this offer with another one.

If you are not sure about an offer, take your time. A renewal is a new agreement with new terms.

How it is worked out

• Payoff of old balance = balance left on the old advance.
• New cash in hand = new funding − fees − old balance.
• New total owed = new funding × new factor rate.
• Cost of the new cash = new total owed − old balance − new cash in hand.
• Cost as a share = cost of the new cash ÷ new cash in hand × 100.

Common mistakes

• Looking at the headline amount instead of the cash in hand.
• Forgetting the old balance is paid off from the new funding.
• Not asking for the old balance in writing.
• Ignoring that a longer term can still cost more in dollars.
• Comparing factor rates without comparing the cash that lands.