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/Articles/Blog/Lending+Product+Prices.html Cost and Pricing Of Lending Products

Cost and Pricing Of Lending Products

Do you struggle to answer your clients’ questions regarding the pricing of the product? Are you losing deals due to concerns on cost?

One of the most effective way to explain a lending product cost is through educating the client on the factors the product pricing is underwritten considering:

Second most effective method is to compare pricing of different products. These comparisons give your client a better understanding of the structure and helps them have an idea of the situation.

Here are some comparisons of business lending products:

Bank Loan Leasing Product Unsecured Term Loan Merchant Cash Advance
Interest Rate: 6.00% Interest Rate: 15.00% Interest Rate: 25.00% Factor Rate: 1.40
Term (months): 60 Term (months): 48 Term (months): 12 Term (months): 6
Amount: $60,000 Amount: $60,000 Amount: $60,000 Amount: $60,000
Total Payback: $78,000 Total Payback: $96,000 Total Payback: $75,000 Total Payback: $84,000
Interest Paid: $18,000 Interest Paid: $36,000 Interest Paid: $15,000 Interest Paid: $24,000

These comparisons in the above chart will definitely vary from one lending company to another. In addition, terms, rates, and amounts will vary with credit, background, cash flow, and industry. However, it can definitely help you allow for that discussion with the merchant depending on their situation and needs.

Last Updated Date: 2018-05-30

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