Quick answer
What makes two funding quotes comparable?
They need to address the same cash requirement and show the same categories of cost and commitment. Compare net cash received, the full payment schedule, separate charges, security, guarantees and the cost of changing the plan. A lower instalment alone cannot establish the cheaper or more suitable arrangement.
Key points
- Compare the same net cash requirement.
- Record dates as well as totals.
- Avoid adding a fee twice when it is already included.
- Test early settlement and delay scenarios.
Fix the amount the business actually needs
Start with the amount available for the project after deductions. If the requirement is £30,000 and one proposal deducts £1,000 at completion, a £30,000 gross advance leaves a shortfall. Ask each provider to quote against the same usable amount or make the difference clear.
Keep the purpose and intended period of use consistent. A short working-capital gap and a five-year equipment purchase need different timing assumptions. Comparing them only by the first monthly payment can obscure what the company is committing to do.
Turn every proposal into dated cash flows
List the initial receipt, every required payment and separate fees on a calendar. Use the provider’s schedule, not an estimate reconstructed from a promotional rate. If a payment varies, record what changes it and create an explicit scenario.
For illustration, Proposal A provides £20,000 and requires 12 payments of £1,850: £22,200 in repayments. Proposal B provides the same £20,000 and requires 24 payments of £1,050: £25,200. B has the smaller monthly payment but the larger total in this invented example. Neither is established as right for a business without its cash needs and other terms.
| Illustrative comparison | A | B |
|---|---|---|
| Net receipt | £20,000 | £20,000 |
| Payment schedule | 12 × £1,850 | 24 × £1,050 |
| Total scheduled repayment | £22,200 | £25,200 |
| Other commitments | Must still be checked | Must still be checked |
Check what each rate label means
A nominal interest rate, an APR, a flat fee and a factor describe different measures. Ask which balance the charge applies to, whether it changes over time and what fees enter the stated measure. The British Business Bank outlines different business loan structures and rates [1].
Use cash amounts to clarify the proposal when the labels differ. A repayment calculator is useful only when its model matches the agreement. A reducing-balance monthly loan calculation does not reproduce a revenue-linked advance or a facility with an unusual final payment.
Put security and flexibility beside price
Record asset security and personal guarantees separately. Ask whose commitment each is, what it covers and how it is released. A small price difference may accompany materially different obligations, so keep the documents available when reviewing the comparison.
Request a settlement figure for a realistic early exit date. For a property facility, also request a delayed-exit scenario. For equipment, establish the end payment and ownership outcome. The objective is to understand the cost of the plan you expect and the cost of a plausible change.
Reconcile the final written proposal
Before deciding, replace illustrative figures with the actual agreement and check the version and date. Ask the broker to explain anything that differs from the earlier quotation. Record any separate broker or professional fees and when they become payable.
Keep an unanswered-questions list. If a cost depends on an event, state that event rather than turning it into a false fixed total. A complete comparison can still contain uncertainty; it should show exactly where that uncertainty sits.
Frequently asked questions
Straight answers
Is the lowest monthly payment the cheapest?
Not necessarily. A longer schedule or final payment can change the total.
Can I use the Felix calculator for every product?
No. It models an illustrative fixed-rate reducing-balance loan with equal monthly payments, not every finance structure.
Should broker fees be included?
Include any fees payable for the proposal and establish who charges them and when.
Sources and further reading
Where the external facts come from
Sources checked on 27 October 2026. Provider links are references; they do not imply a partnership or an available offer.
- British Business Bank: different types of business loan ↗
Background to differing borrowing structures.
