01A straight answer
On a $100,000 advance at 1.35 over 10 months
Most of what follows argues against the product we arrange. Atlas Business Capital is paid only when a file is placed, so weigh this page with that in mind. Then take it at face value, because we would rather lose your file than place one that damages your business.
02Say no
Six situations where an advance makes the problem worse. Any one of them is enough.
Take it. A bank term loan or a revolving line costs materially less than any advance, and the repayment schedule is far gentler. An advance exists for businesses that cannot get bank money in the time they have. If a bank will say yes, this is the wrong product and we will tell you so.
The ACH debit leaves your account every week whether the week was good or not. Test it against your four worst weeks of the last year, not your average week, and check the payment still clears with payroll and suppliers covered. If it only works in a good week, it does not work.
An advance solves a timing problem: revenue that is coming but has not arrived yet. It cannot solve a business that loses money every month. Adding a weekly obligation to a monthly loss makes the shortfall bigger and makes it arrive sooner. Fix the margin first.
Stacking is how a manageable obligation becomes an unmanageable one. Every additional position takes another slice of the same weekly deposits, and those slices do not shrink when revenue does. If you already have advances outstanding, the honest next move is usually consolidation or payoff, not another one.
Speed is the thing you are paying for. If the money is not needed for two or three months, that is enough time for an SBA application, a bank line or an equipment lender to work. Every one of those costs less. Paying an advance price for money you do not need yet is expensive convenience.
“Cash flow” is not a use of funds. If you cannot name the order, the invoice, the machine or the payroll run the money is going to, and put a rough dollar figure on what it produces, there is no way to know whether the cost is worth paying. Work that out first. The option will still be there afterwards.
03Say yes
An advance is expensive capital bought for speed. That is a sound trade in a narrow set of circumstances, and these are the honest ones.
The common thread
A customer places an order, or a supplier prices a volume you can move, and the gross margin on that specific deal is larger than the total cost of the advance. You buy, you deliver, and the revenue the stock produced covers the payments. Both numbers are knowable before you sign.
The work is done, the invoice is issued, and payment is contractually due inside the term. The advance covers the gap between doing the work and being paid for it. Check when that customer actually pays rather than when they are meant to. If they habitually run late, the gap is longer than the paperwork says.
A machine, vehicle or fit-out that adds capacity or removes a cost, where the extra margin over the term clearly exceeds what the advance costs. Equipment financing is cheaper if you have time to arrange it. An advance makes sense when the equipment has to be earning now.
Last year's deposits show the same ramp, and you need stock, staff or marketing in place before it starts. Match the term to the season: repayment runs 5 to 18 months, and it should still be running when the revenue lands, not finished before it.
Deposits are strong and the business is profitable, but the file failed on a personal credit number. Funders weight deposits more heavily than banks do, which is why scores from 500 to 600+ are considered at all. That is a real reason to use an advance, and it is also why it costs more.
04Alternatives
Every option below costs less than an advance. Most take longer, ask for more paperwork, or set a higher bar to qualify. That is the entire trade. If you have time, spend it here first.
Our interest, stated plainly
Atlas Business Capital is a broker. We are paid a commission by the funder when an advance is placed, and nothing on this list earns us anything. We publish it because the wrong product placed today is a file that comes back as a problem, and because a business that was told the truth comes back on its own.
| Option | Where it fits | The trade-off |
|---|---|---|
| SBA loan | The longest terms and the lowest cost of anything on this list, for established businesses with reasonable credit and complete financials. | Weeks to months from application to funding, and a substantial document pack. |
| Bank line of credit | Revolving, so you draw only what you need and pay only for what you draw. The right tool for recurring short gaps. | Underwritten on credit and financials. Easiest to arrange before you need it, hardest once you do. |
| Equipment financing | The equipment itself secures the deal, so pricing is far below unsecured money and terms run for years. | Pays for equipment and nothing else, and the lender holds a security interest in it. |
| Invoice factoring | You sell specific unpaid invoices, so the cost tracks the days they are outstanding rather than a fixed factor over a fixed term. | Needs business customers who pay on invoice, and they usually learn about the arrangement. |
| Supplier terms | The cheapest capital there is. Ask for net 45, net 60 or seasonal dating before you pay anyone for money. | Depends on your payment history and the relationship, and may cost you an early-settlement discount. |
| Business credit card | Reasonable for a genuinely short gap of a few weeks that you can clear in full. | Expensive if the balance rolls, limits are usually small, and it is normally personally guaranteed. |
None of these are products Atlas Business Capital arranges, and none of them are worse than an advance. They are slower or harder to qualify for, which is the only reason an advance exists.
05The test
There is one question underneath every decision on this page, and it takes about ten minutes to answer properly.
Multiply the advance by the factor rate: that is what you repay in full. Then subtract the origination fee (2% to 10%, deducted at funding) to get what actually reaches your account. The gap between those two figures is the cost. Use that number. Never the factor rate.
In dollars, on paper. The gross margin on the order. The labor the machine removes. The revenue the season brings that you would otherwise miss. A number you cannot write down is not a projection, it is a hope, and hope does not clear a weekly debit.
Repayment starts almost immediately and runs weekly for 5 to 18 months. A return that shows up in month fourteen does nothing for a payment due in week six. The money has to come back at least as fast as it goes out.
If what the money produces is comfortably larger than what it costs, an advance can be a rational purchase of capital. If the two are close, or you have to be optimistic to get there, the answer is no. Close is not good enough at this price.
One thing can move the math in your favor: most funders discount the outstanding balance substantially for early payoff. If the return you are counting on arrives ahead of the term, that discount is real money. Ask for the early-payoff terms in writing before you sign, not after.
Worked example
The factor cost on a $100,000 advance at 1.35
Because only $90,000 to $98,000 of that advance reaches the account once the fee is deducted, the true cost is $37,000 to $45,000, not $35,000. That larger figure is the one your use of funds has to beat.
Run your own numbersIf you cannot write the return down in dollars, the answer is no.
Call and say what the money is for, what you expect it to produce, and roughly what the business deposits in a month. If an advance is the wrong tool for it, we will say so and point you at what to look into instead. There is no cost for asking, and we do not pull your credit.
Speak to a person
(305) 791-3797funding@atlasbusiness.capitalMon–Fri, 9am–6pm ET · We answer in under 4 business hours.