Reading an offer sheet, and what it leaves out

The six numbers an offer must contain

1. Funded amount / purchase price. What the funder pays for the receivables.
2. Purchased amount. What you will deliver in total.
3. Specified percentage. The share of receipts the funder is entitled to.
4. Remittance amount and frequency. The dollar figure and whether it is daily, weekly or otherwise.
5. Every fee, with amount and trigger. Withheld at closing and charged during the deal.
6. Net wire. The dollar figure that will actually reach your account.

If any of those is missing, you do not yet have an offer you can evaluate. Ask for the missing ones in writing before you spend time on anything else.

Then do one piece of arithmetic yourself: purchased amount divided by remittance gives the number of payments, and dividing by about 21 business days gives the rough duration in months. That number is usually absent, and it is the one that tells you what the deal will feel like.

What is usually missing

Two sheets on the same grid

Illustrative only — two offers for $100,000.

B is cheaper by $7,500 in dollars, more expensive by eleven points annualised, and takes $305.55 more out of every business day — $1,527.75 a week.

Not one of those five derived figures appears on either sheet. Each states a funded amount, a purchased amount and a debit, and leaves you to assume the smaller total is the better deal. Sometimes it is. For a business that cannot carry an extra $1,500 a week for four months, it plainly is not, and the sheet gives you no way to see that.

The offer sheet is not the deal

Term sheets in this market are frequently non-binding summaries, and the executed agreement governs whatever they say. Two consequences.

First, differences between the sheet and the contract get resolved in favour of the contract. Read both and query anything that does not match, in writing, before signing.

Second, ask for the complete document pack before you commit to anything — the agreement, the personal guarantee, the ACH authorisation, any confession of judgment affidavit, and every addendum. Ask for all of it at once. The guarantee and the affidavit are the two documents most likely to arrive last, bundled into a signing packet at the point where you have stopped reading.

The line about your existing balance

If you already have an active advance, the sheet may quote a gross funded amount that includes retiring it. Ask for three figures separately: the gross funded amount, the payoff going to the existing funder, and the net new cash reaching your account.

Then put the entire cost of the new deal against the net new cash, because that is the only money this deal actually gave you. On a renewal taken part-way through a position, the cost per dollar of genuinely new money is routinely far above the headline. A sheet that shows only the gross figure is describing the transaction rather than your position.

What to do about the four missing items

Ask for them in one message, in writing, before you spend time on anything else:

1. The complete fee schedule that applies after funding, with the amount and the trigger for each.
2. The reconciliation clause, quoted verbatim, together with what you must send, to whom, and by when.
3. The event-of-default list, and whether any cure period exists for any item on it.
4. Confirmation of every document in the signing pack by name and page count — agreement, guarantee, ACH authorisation, any affidavit, every addendum.

Send it on a Tuesday morning rather than at four on a Friday. How fast and how completely that message is answered is itself information about who you are dealing with, and collecting it costs you nothing.

One habit worth keeping

Put every offer on the same one-page grid: cash to hand, total delivered, remittance and frequency, estimated business days, and the three clause references you care about — reconciliation, default, guarantee. Comparing two offers on their own layouts is how the more expensive one wins.