Payment Frequencies: Daily vs Weekly vs Monthly
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Payment frequency affects your daily cash flow and loan terms. Understanding the options helps you choose the best fit for your business operations.
Daily payments
- Amount: Small daily deductions (often 5-15% of daily sales)
- Best for: High-volume, consistent daily revenue businesses
- Examples: Restaurants, retail stores, service businesses
- Pros: Predictable, matches daily cash flow
- Cons: Can feel restrictive, harder to budget for large expenses
Weekly payments
- Amount: Moderate weekly payments
- Best for: Businesses with weekly revenue cycles
- Examples: Contractors, consultants, seasonal businesses
- Pros: Balance of flexibility and predictability
- Cons: May not match all revenue patterns
Monthly payments
- Amount: Larger monthly payments
- Best for: Businesses with monthly revenue cycles
- Examples: B2B service companies, subscription businesses
- Pros: More flexibility, easier to budget
- Cons: Larger impact on monthly cash flow
Factors to consider
- Revenue pattern: Match payment frequency to when you receive money
- Cash flow management: Can you handle the payment amount and timing?
- Business seasonality: Consider slower months
- Loan terms: Some frequencies offer better rates
Negotiating payment terms
- Ask about payment frequency options
- Request seasonal adjustments if applicable
- Consider payment holidays for slow periods
- Compare total cost across different frequencies