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Which position to pay off first
Divide the daily remittance by the remaining balance. The highest number is usually the answer, and there are three situations where it is not.
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Which position should I pay off first?
Compute daily remittance divided by remaining balance for each position and rank them highest first — that ratio tells you how much daily cash relief each dollar of payoff buys, and on fixed-repayment products only a complete payoff removes a debit at all. Three things override the ranking: a position that has escalated to enforcement, a position whose lien is blocking a transaction worth more than the cash relief, and a position offering a genuine discount that changes its effective price. Get payoff quotes rather than estimating balances, and ask each funder in writing what a partial payment does before you send one.
Divide each position's daily remittance by its remaining balance. Rank highest to lowest. That is the default answer, and it is right more often than any intuition about which funder is most aggressive or which balance is largest.
Why that ratio
The ratio measures cash relief bought per dollar spent. A position taking $310 a day against a $9,800 balance returns $31.63 of daily relief per $1,000 cleared. One taking $620 a day against $31,500 returns $19.68. The first is a 61% better purchase per dollar, even though the second has the larger payment.
- A: $18,200 remaining, $450 a day → $24.73 per $1,000
- B: $31,500 remaining, $620 a day → $19.68 per $1,000
- C: $9,800 remaining, $310 a day → $31.63 per $1,000
Order: C, A, B.
With $20,000 available, clearing C costs $9,800 and removes about $6,718 a month of outflow, leaving $10,200. Clearing A instead costs $18,200 and removes about $9,752 a month, leaving $1,800.
C is the better ratio. A is the bigger single reduction. Which you want depends on whether you need a specific monthly number or the best return per dollar — and on what the leftover cash can do, which brings in the point below.
The structural fact that makes complete payoffs matter
On a fixed-repayment advance, a partial payment usually shortens the tail rather than reducing the daily remittance. Paying $10,200 against Position A removes about 22.7 business days from the end of the schedule and changes tomorrow's outflow by nothing.
So spreading $20,000 across three positions can buy zero immediate cash relief, while spending $9,800 of it on one complete payoff buys $6,718 a month. If cash flow is the constraint, clear positions outright.
On an amortising loan the opposite may hold: a principal prepayment reduces interest and, depending on the contract, either shortens the term or lowers the payment. Ask which, in writing, before sending anything — the two outcomes are not interchangeable and the contract decides.
The three overrides
What the ratio does not capture
Check the remaining term as well as the ratio
The ratio and the remaining term carry the same information in inverted form: remaining balance divided by daily remittance is the number of business days left.
In the example, C has 31.6 business days left, A has 40.4 and B has 50.8. The position with the best relief ratio is also the one closest to finishing on its own — which is the uncomfortable part of the arithmetic. Spend $9,800 clearing C and you have bought about six and a half weeks of relief you would have received anyway by waiting.
That matters when the cash is scarce and the crisis is short. If the trough in your cash flow lasts eight weeks and C clears itself in six, the money is better spent on A, whose relief arrives sooner relative to its natural end. Set the payoff decision against the shape of the shortfall, not against the ratio in isolation, and the thirteen-week model is what tells you the shape.
The order of operations
- Request a payoff quote from every position, each good through the same date. Do not estimate.
- Compute the ratio for each and rank them.
- Flag any position that is escalating or blocking, and move it to the top.
- Ask each funder in writing what a partial payment does to the schedule.
- Buy complete payoffs, not fractions, on fixed-repayment products.
- Recompute after each payoff, because the leftover cash faces a different set of choices.
- Keep a per-diem buffer so a payoff letter that expires mid-wire does not leave a small balance and a live lien.
The figure to carry into the next conversation
After clearing one position, your total monthly debt service is a new, lower, verifiable number. In the example, clearing C takes total outflow from about $29,905 a month to about $23,187. That figure is the opening line of any restructure conversation with the remaining funders, and it is much more persuasive than a statement of intent.
Be aware of the other side of it: a funder who learns you found $20,000 and spent it elsewhere may react. If you are negotiating with more than one at the same time, the sequencing decision is also a disclosure decision, and it is better made deliberately than discovered.
What to have ready
Payoff quotes, a written answer from each funder on partial payments, and a thirteen-week cash flow model that tells you how much monthly relief the business actually needs. Without the third item you are optimising a ratio without knowing the target.
What a partial payment does, whether any discount is available and what a missed remittance triggers all depend on your specific agreements and the state law they select. This describes the arithmetic and is not legal advice.
Where this applies
Related questions
Which position should I pay off first?
Compute daily remittance divided by remaining balance for each position and rank them highest first — that ratio tells you how much daily cash relief each dollar of payoff buys, and on fixed-repayment products only a complete payoff removes a debit at all. Three things override the ranking: a position that has escalated to enforcement, a position whose lien is blocking a transaction worth more than the cash relief, and a position offering a genuine discount that changes its effective price. Get payoff quotes rather than estimating balances, and ask each funder in writing what a partial payment does before you send one.
Which funding products does this apply to?
Merchant Cash Advance, Working Capital, Revenue-Based Financing. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.
Are the figures here quotes?
No. Every worked example is labelled illustrative and exists to show the arithmetic. What a particular lender charges is on that lender's page, where it publishes it at all.
Who writes this?
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.
Is this financial or legal advice?
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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