Which funding products does this apply to?

Working Capital, Term Loan, Business Line of Credit. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Is this specific to construction?

It is written around how a construction business actually generates and collects cash, which is what makes its funding problem different. The mechanics transfer; the arithmetic may not.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

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No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

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A shorter expensive facility or a longer cheaper one

The expensive one stops. The cheap one keeps running. Whether that is good news depends on whether the cash the money funded ever comes back.

By Find Me Funders research desk Updated 14 September 2026 978 words 4 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

The cost of a short facility is bounded by its length: you pay it, it ends, and nothing accrues afterwards. The cost of a long facility accrues for every day the balance is outstanding, and it is outstanding until you clear it. That is the whole structural difference, and it means the comparison turns on one thing — how long you actually need the money, not how long the contract runs.

Most owners compare the two on price per dollar and pick the cheaper number. That is the right arithmetic applied to the wrong horizon.

The two facilities

Illustrative only —you need $80,000.

Short: six months, total cost $6,400 (8% of the amount), repaid and closed.
Long: sixty months at 11.5%, payment $1,759.41, plus a 5% origination fee of $4,000, plus a 3% prepayment penalty on the balance if you clear it in the first three years.

Over the full sixty months the long facility costs $25,565 of interest plus $4,000 of fee. The short facility costs $6,400. Quoted like that, nobody would choose the long one, and the comparison is meaningless because the two are not doing the same job.

Where the short expensive facility wins

Illustrative only —the need is genuinely six months: a seasonal inventory build that sells through by spring, or a receivable you know will land.

Short facility, one cycle: $6,400.
Long facility, prepaid at month six: $4,455 of interest, plus the $4,000 origination fee, plus a $2,217 prepayment penalty. Total $10,672.

The "cheap" money costs $4,272 more for the same six months. The origination fee is the culprit: a one-time charge amortised over six months is not a low-cost structure no matter what the rate says. And the penalty exists precisely to stop you from using a long facility as a short one.

At month twelve it is still closer than you would expect: two short cycles at $12,800 against $14,575 all-in on the long one. The short facility is $1,775 ahead.

Where the longer cheaper facility wins

Illustrative only —the need turns out to be permanent. Your cash conversion cycle lengthened because customers now pay in 60 days instead of 30, and that is not reversing.

Now you roll the short facility. Four cycles over twenty-four months at $6,400 each: $25,600.

The long facility over the same twenty-four months: $15,580 of interest plus the $4,000 origination fee, $19,580. It is ahead by $4,419, and the gap widens every month afterwards — by month thirty-six the short route has cost $38,400 against $24,901.

The crossover sits between month twelve and month eighteen.At eighteen months the long facility is ahead by $1,115 and never gives the lead back.

The variable that flips it: whether the cash the facility funds comes back.Inventory that sells, a receivable that collects, a project that bills — the cash returns, the facility closes, and the short one was correct. A structural increase in working capital needs does not come back, and each renewal charges the full fee again on money you never stopped using.

The measures do not line up

A short facility is often priced as a total cost, a factor, or a flat fee. A long facility is priced as an annual rate plus an origination fee. You cannot rank a factor against a rate, because one has no time dimension and the other is defined by it. Anyone who offers you a single comparison number without stating a number of months has either made an assumption they did not share or does not understand the instrument.

Build the comparison yourself on one measure: total dollars of cost at month 6, 12, 18, 24 and 36, including every fee and every penalty, assuming you renew the short facility as needed. Five rows. That table answers the question and nothing else does.

Renewal is not a neutral event

Two things make rolling a short facility worse than the arithmetic suggests.

The fee restarts.Whatever the origination or closing cost is, you pay it again. Over four cycles that is four fees on one continuing need.

The balance rolls.On many short products the renewal pays off the outstanding balance with new money and prices the whole new amount, so you pay the cost again on principal you already owed. Ask what the net new cash is and what it cost you, not what the new facility totals.

The questions that settle it

What specific event repays this? Name it, date it. "Improved cash flow" is not an event. An invoice with a due date is.
If that event slips by ninety days, what do I do? If the answer is "renew", you are on the long-facility path and should price it that way now.
What is the all-in cost at month 18 on each? Build the five-row table. Use your own numbers.
Is there a penalty for clearing the long facility early, and how does it decline? A 3/2/1 structure changes the answer to question three completely.

What to ask for, and what to refuse

Ask for the payoff figure at month six on the long facility, in writing, including the penalty. Ask the short lender what the renewal costs and whether the balance rolls into the new deal.

Have a short written statement of what repays the facility and when — it improves both applications and it forces you to answer question one honestly.

Refuse to compare a total-cost quote against a rate quote without converting. Refuse a long facility whose origination fee is not disclosed as a dollar figure before you sign. And refuse to plan on a renewal you have not been promised: renewal is always at the funder's discretion, and the month you need it most is the month the file looks worst.