Fixed Fees vs Sales-Based Deductions in UK Merchant Cash Advances
By Mehmi Financial Group | Research reviewed: 1 November 2026
When comparing merchant cash advances (MCAs) in the UK, two figures deserve particular attention: the fixed financing fee and the percentage of sales deducted towards repayment.
These figures are often confused, but they serve very different purposes.
A fixed fee determines the agreed cost of the funding, while sales-based deductions determine how money is collected from your business's future revenue.Most traditional merchant cash advances combine both features rather than offering them as competing alternatives.
For example, a UK business might receive £20,000 in funding with a £3,000 fixed financing fee. It would then agree to remit £23,000 in total, with collections calculated as a percentage of qualifying card sales.
If the agreed deduction is 12%, the business generally contributes more towards the advance during busy trading periods and less when eligible sales decline.
However, the total contractual amount does not necessarily change when sales fluctuate, and some providers impose minimum payment requirements.
For restaurants, takeaways, pubs, retailers, beauty salons, convenience stores and online businesses, understanding this distinction is essential before accepting funding.
This guide explains how fixed MCA fees work, how sales-based deductions affect daily cash flow, what UK providers actually offer, and how to compare funding arrangements without confusing the cost of financing with the speed of repayment.
Fixed Fees vs Sales-Based Deductions: The Key Difference
A merchant cash advance typically involves three important financial figures.
1. The fixed funding fee
This is the agreed financing charge associated with receiving the advance. It is generally established when the funding agreement is accepted.
2. The sales deduction percentage
Also called aholdback rate,collection percentageorremittance rate, this determines what proportion of qualifying sales is directed towards satisfying the agreed funding obligation.
3. The total amount to be collected
This is the combined amount that must be remitted under the normal terms of the agreement, generally consisting of the original funding amount plus the fixed financing charge.
These figures answer three different questions: How much does the financing cost? How much of your sales will be collected? And how much must ultimately be remitted?
A lower deduction percentage does not automatically mean cheaper financing. Equally, a lower fixed fee does not necessarily mean that the business will retain more cash from each day's sales.
The UK'sBritish Business Bankexplains that traditional merchant cash advances use future card transactions to support collections, meaning the repayment period can vary with trading performance.
The important decision is whether the total funding cost and the sales deduction mechanism are both appropriate for the business.
How Do Fixed Fees Work in a UK Merchant Cash Advance?
A fixed funding fee is the amount charged for providing the agreed advance, typically established before the business accepts the financing.
Unlike a conventional loan where interest may accrue over time, many merchant cash advances establish the total financing cost at the outset.
The provider agrees to advance a specified amount in exchange for a larger amount of future qualifying sales.
Example: £20,000 MCA With a Fixed Fee
Illustrative example only — these figures are not an actual provider quotation or a current market rate.
Suppose a UK retailer receives the following hypothetical offer.
Funding received:£20,000
Fixed financing fee:£3,000
Total amount to be collected:£23,000
Sales deduction percentage:12%
The business receives £20,000 upfront and agrees to remit £23,000 through qualifying future sales.
The £3,000 funding fee represents 15% of the original amount advanced.
This means the business knows the agreed financing charge before accepting the offer.
However, it does not necessarily know the exact date on which the entire amount will have been collected.
That depends on future sales performance, the contractual collection mechanism and any minimum payment requirements.
Is a Fixed MCA Fee the Same as an Interest Rate?
No.
A fixed funding fee expressed as a percentage of the advance is not equivalent to an annual interest rate or annual percentage rate (APR).
In the example above, the financing charge equals 15% of the upfront funding.
That does not mean the business has received financing at 15% APR.
If the agreed amount is collected over six months rather than twelve months, the annualised financing cost can be substantially different.
This is because the length of time the business has access to the funding matters, as does the fact that collections may occur throughout the financing period.
For a more detailed explanation, seeHow Much Does a Merchant Cash Advance Cost in the UK?.
What Is a Merchant Cash Advance Factor Rate?
Some providers express the total amount payable using a factor rate.
A factor rate is a multiplier applied to the original funding amount.
Using the hypothetical £20,000 advance:
£23,000 ÷ £20,000 = 1.15
The resulting factor rate is 1.15.
This indicates that the total contractual amount is 1.15 times the original funding amount, assuming there are no other financing charges.
A factor rate of 1.15 therefore corresponds to a flat financing charge of 15% of the upfront amount.
It is not an APR and should not be compared directly with a conventional business loan's annual interest rate.
How Do Sales-Based Deductions Work in UK Merchant Cash Advances?
Sales-based deductions determine how an MCA provider collects the agreed amount from your future trading revenue.
Rather than requiring the same payment every month, traditional MCAs generally collect a predetermined percentage of qualifying card sales.
This percentage may be called the holdback rate, collection rate, purchased percentage or remittance rate.
The terminology varies between providers.
Example: A 12% Sales Deduction
Suppose a UK café accepts an MCA with an agreed 12% deduction from eligible card sales.
If it processes £1,000 in qualifying card transactions during a trading day, £120 would be allocated towards satisfying the advance.
The remaining £880 would be available before other applicable deductions, including card-processing fees and any relevant settlement adjustments.
On a day with £500 in eligible card sales, the corresponding MCA deduction would be £60.
If the café processes £2,000 in eligible card sales, the deduction would increase to £240.
The percentage remains unchanged, but the amount collected increases or decreases with qualifying sales.
The deduction percentage can be fixed even though the daily cash amount deducted is variable.
This is the central distinction between a fixed holdback percentage and a fixed monetary repayment.
Are Sales-Based Deductions Taken Daily or Weekly?
Many merchant cash advances calculate deductions from daily sales or card settlements.
However, collection methods differ.
Some providers withhold money directly from card transactions or merchant settlements. Others calculate a percentage of reported revenue and debit the business bank account.
For example,Shopify Capital UKcalculates its remittances using eligible Shopify sales and collects the resulting amounts from a connected business bank account.
Square Cash Advance UKinstead withholds an agreed percentage of qualifying card transactions processed through Square.
Consequently, two products described as merchant cash advances may have different collection arrangements despite using similar pricing structures.
Worked Example: How Changing Sales Affect MCA Deductions
Consider a hypothetical UK restaurant that has received £20,000 in funding.
The agreed total to be collected is £23,000, including the £3,000 fixed fee.
The restaurant's MCA deducts 12% of qualifying card sales.
The following scenarios demonstrate how its collections might change.
Scenario 1: Quiet Trading — £12,000 Monthly Card Sales
At £12,000 in qualifying monthly card sales, a 12% deduction would produce approximately £1,440 in monthly MCA collections.
If sales remained at this level, the £23,000 total would be collected over approximately 16 months.
That is a simplified projection, not a contractual repayment term.
Scenario 2: Normal Trading — £24,000 Monthly Card Sales
At £24,000 in monthly qualifying card sales, the 12% deduction would produce approximately £2,880 in monthly collections.
At that consistent sales level, the agreed £23,000 would be collected in approximately eight months.
The original £3,000 financing fee remains unchanged.
Scenario 3: Strong Trading — £36,000 Monthly Card Sales
If monthly qualifying card sales increase to £36,000, the deduction would rise to approximately £4,320.
At that constant sales level, the total would be collected in approximately 5.3 months.
The business would complete the financing arrangement more quickly, but the fixed funding fee would not automatically decrease.
All three scenarios are illustrative calculations.They assume constant monthly qualifying sales, an unchanged 12% deduction rate, no additional fees, no minimum remittance adjustments and no interruptions. Actual collections occur according to the signed agreement and may not follow a uniform monthly pattern.
What Does This Example Tell You?
The financing cost and repayment speed are separate considerations.
The business does not necessarily save money by completing the MCA quickly. Instead, it satisfies the agreed collection amount over a shorter period.
Likewise, a slower trading period may reduce the cash deducted from current sales, but it can extend the period during which the business remains subject to the MCA agreement.
Sales-linked deductions therefore provide potential cash-flow flexibility, not necessarily a lower financing cost.
Do UK MCA Providers Really Offer Fixed Fees and Flexible Deductions?
Yes. Several established UK programmes publish terms combining a predetermined funding cost with sales-linked collections.
However, the details vary considerably, particularly around minimum remittances and the length of the agreement.
PayPal Working Capital UK
PayPal Working Capitaluses one fixed financing fee and an agreed percentage of qualifying PayPal sales for automatic repayments.
Eligible businesses can choose a repayment percentage from the available options before accepting their advance.
However, PayPal also requires minimum repayments every 90 days.
According to itsUK minimum repayment guidance, the applicable minimum may be 5% or 10% of the total advance and fixed fee, depending on the selected terms.
This means a business with declining PayPal sales could still face a minimum repayment obligation.
The funding fee is fixed, but repayment flexibility is subject to contractual conditions.
Square Cash Advance UK
Square provides merchant cash advances to eligible UK customers, using a fixed funding cost and a percentage of future qualifying Square card sales.
Square's published guidance explains that collections decrease when card sales fall and increase when sales rise.
Its Cash Advance product does not have fixed monthly repayment requirements or a specified repayment term.
Square also states that it does not require minimum payments under this product.
This is an important distinction from products that impose periodic collection thresholds.
Square Cash Advance is separate from Square Loans, which have different financing arrangements.
Shopify Capital UK
Shopify Capital provides UK merchant cash advances through YouLend under a receivables-purchase arrangement.
The business receives an agreed amount upfront and remits a percentage of qualifying daily sales until the contracted total is satisfied.
Shopify's UK guidance states that its MCA has no fixed deadline for remitting the full amount.
Where there are no qualifying sales on a particular day, no corresponding daily remittance is processed.
However, payments that fail or are paused in circumstances covered by the agreement may create default issues.
The product also uses a different collection mechanism from some card-terminal MCAs because the amount calculated from Shopify sales is debited from a linked business bank account.
Lloyds Bank Cardnet Merchant Cash Advance
Lloyds Bank Cardnet's Merchant Cash Advanceis provided through Liberis.
The programme combines an agreed fixed financing cost with automatic collections calculated as a percentage of customer card transactions.
However, its published conditions require the business to operate in a way that allows a minimum monthly amount of 3% of the total amount owed to be repaid.
This illustrates why businesses should not interpret every sales-linked MCA as having completely unrestricted repayment flexibility.
What These Provider Examples Demonstrate
The UK market does not have one universal MCA repayment structure.
PayPal, Square, Shopify Capital and Lloyds Cardnet each describe a form of sales-linked financing, but their contractual treatment of minimum payments and collection deadlines differs.
A business should therefore compare the specific terms of an individual offer rather than relying on general descriptions such asflexible repaymentsorone fixed fee.
Fixed Fee vs Deduction Percentage: Which Matters More?
Both matter, but for different reasons.
The fixed fee determines the agreed financing cost. The deduction percentage determines how much immediate trading revenue is allocated towards satisfying that amount.
A business focused exclusively on the lowest financing fee may overlook the effect of substantial daily deductions.
A business focused only on the lowest deduction percentage may accept a materially more expensive advance.
The appropriate structure depends on the company's margins, trading stability, working capital requirements and existing financial commitments.
Comparing Two Hypothetical MCA Offers
Consider a business seeking £20,000 in funding and receiving two illustrative offers.
Offer A — Lower Fixed Fee, Higher Deduction
Funding amount: £20,000.
Fixed financing fee: £2,400.
Total to be collected: £22,400.
Sales deduction percentage: 15%.
At £24,000 in monthly qualifying card sales, approximately £3,600 would be collected each month.
Offer B — Higher Fixed Fee, Lower Deduction
Funding amount: £20,000.
Fixed financing fee: £3,000.
Total to be collected: £23,000.
Sales deduction percentage: 9%.
At the same £24,000 monthly qualifying sales level, approximately £2,160 would be collected each month.
Which Offer Is Better?
Offer A costs £600 less in total financing fees.
However, it allocates £1,440 more towards monthly collections at the illustrated sales level.
Offer B costs £600 more overall, but leaves a greater proportion of qualifying monthly card receipts available for ongoing business expenses during the collection period.
Under the simplified constant-sales assumptions, Offer A would finish collecting the agreed amount sooner than Offer B.
For a business with comfortable cash reserves and strong operating margins, the lower-cost option might be preferable.
For a business with significant payroll, rent or inventory commitments, the lower deduction percentage might be easier to manage, although it would cost more overall in this example.
Neither option is automatically suitable.
The comparison should also account for contractual minimums, fees, business risks and other finance available.
These offers are entirely hypothetical and are not actual products, quotes or proposed pricing from Mehmi Financial Group or any named provider.
Why Sales-Based Deductions Can Still Put Pressure on Cash Flow
An MCA may adjust with revenue, but revenue is not the same as available profit.
A business can generate substantial card turnover while retaining only a relatively small amount after operating expenses.
This is particularly important for businesses with high inventory costs or labour-intensive operations.
Deductions May Be Calculated on Gross Sales
Some providers calculate the MCA percentage using gross sales rather than net profit or the amount remaining after business expenses.
Square's UK Cash Advance guidance expressly states that its collection percentage applies to gross card sales, including applicable VAT and tips received through cards.
It also confirms that MCA deductions are made in addition to normal Square processing fees.
Shopify Capital's UK guidance similarly describes a broad gross-sales calculation that includes applicable sales taxes and other order charges.
It states that completed orders may count even if they are subsequently refunded or cancelled.
The exact revenue definition depends on the provider.
For a business owner, this distinction can materially affect cash flow.
Example: High Turnover but Limited Cash Available
Imagine a hypothetical business with £1,000 in qualifying card receipts for the day.
If its MCA deduction is 12%, £120 is allocated towards the advance.
However, the remaining £880 is not necessarily available profit.
The business may still need to account for stock costs, wages, rent, utilities, card-processing charges and tax liabilities.
If the business operates on a narrow margin, deductions calculated from gross receipts can absorb a significant proportion of the cash it would otherwise retain.
For this reason, an MCA affordability assessment should consider operating cash flow rather than card turnover alone.
What Happens During a Seasonal Downturn?
Suppose a retail business normally generates £30,000 in qualifying monthly card sales.
At a 12% deduction rate, the corresponding collection amount would be £3,600.
If card sales decline by 40% to £18,000, collections would decrease to £2,160 under a straightforward percentage-of-sales arrangement.
That reduction could help preserve some cash during the quieter period.
However, the business may still face largely unchanged premises costs, insurance, finance commitments and staffing expenses.
A lower MCA deduction does not necessarily compensate for a substantial revenue decline.
If the agreement also requires minimum payments, the business may need to contribute additional money despite the lower sales.
What Happens if Card Sales Stop Completely?
The outcome depends on the merchant cash advance provider and the contractual circumstances.
Under some genuinely sales-linked arrangements, no qualifying sales means no automatic percentage-based deduction for that day.
Square Cash Advance UK and Shopify Capital UK both publish product guidance describing this general mechanism.
However, this does not mean every outstanding obligation disappears when sales stop.
Other agreements may contain minimum remittance requirements, default provisions or obligations concerning continued trading and payment processing.
It is also important to distinguish between a legitimate loss of sales and deliberate diversion of transactions away from an agreed collection arrangement.
For example, PayPal Working Capital expressly restricts diverting sales away from PayPal while an advance remains outstanding.
A business experiencing an extended downturn should review its agreement and contact the funding provider promptly.
For further guidance, read our article onMerchant Cash Advance vs Business Loan UK.
Does Paying a Merchant Cash Advance Early Reduce the Fixed Fee?
Not necessarily.
One of the most important differences between fixed-fee MCAs and some conventional business loans is the treatment of early settlement.
Where a provider has agreed to purchase a specified amount of future receivables for a fixed price, completing the arrangement early does not automatically reduce the original financing charge.
For example, Shopify Capital UK's published terms explain that voluntarily remitting the outstanding balance does not reduce the agreed total financing cost.
Similarly, Lloyds Cardnet states that its Liberis-linked product retains the fixed upfront funding fee when the business completes payment early after the initial 14-day period, although there is no separate early-payment fee.
This means a business may finish its MCA in five months rather than ten without saving money on the original fixed charge.
However, arrangements differ, and any contractual cancellation rights, adjustments or early-settlement provisions must be reviewed individually.
No early repayment penalty is not the same as an early repayment discount.
Before accepting an MCA, ask for the amount required to satisfy the arrangement at different potential settlement dates.
Can You Negotiate a Lower Sales Deduction Percentage?
Potentially, depending on the funding provider and the options available to your business.
Some programmes permit eligible applicants to select or adjust the proposed collection percentage before accepting funding.
PayPal Working Capital allows approved applicants to choose from available repayment percentages.
Lloyds Cardnet also explains that eligible businesses can discuss the funding amount and the percentage of card transactions allocated towards collections through its Liberis programme.
However, the funding fee and deduction percentage may be linked within the provider's pricing model.
Selecting a lower deduction percentage could affect the cost or structure of an offer.
It should not be assumed that the provider will reduce the percentage while leaving every other contractual term unchanged.
A sensible approach is to request written illustrations showing how different collection percentages would affect the agreed total cost and projected cash flow.
How to Compare Fixed Fees and Sales Deductions Before Accepting an MCA
Before accepting a UK merchant cash advance, review the complete written offer and ask the following questions.
1.How much will my business actually receive?Confirm the net amount made available after any deductions or fees withheld at funding.
2.What is the total financing charge?Identify the fixed fee and any other compulsory charges under the normal contractual terms.
3.What is the total amount to be collected?Request the full amount of future sales revenue being purchased or remitted under the agreement.
4.What percentage of sales will be deducted?Confirm the holdback or remittance percentage and whether it can change.
5.Which sales count towards collections?Establish whether deductions apply to gross card receipts, online revenue, VAT-inclusive transactions, tips or other qualifying sales.
6.Are there minimum repayments or deadlines?Determine whether lower sales could create additional payment obligations.
7.What happens if I settle early or sales decline?Review cancellation rights, early-settlement terms, trading restrictions, default provisions and any guarantees.
8.How much cash will remain for normal business expenses?Test the proposed collections against realistic sales, profit margins, supplier costs, wages and existing finance commitments.
The objective is not simply to minimise the headline fee or select the smallest deduction percentage.
It is to determine whether the entire arrangement is affordable and commercially appropriate.
For guidance on obtaining comparable terms, readGet a Business Cash Advance Quote UK.
Fixed MCA Fees vs Fixed Monthly Business Loan Repayments
A fixed funding fee should not be confused with a fixed monthly repayment.
A merchant cash advance can have a fixed financing cost while collecting variable amounts from daily or weekly trading revenue.
A conventional business loan, by contrast, may require scheduled monthly instalments.
Where a business loan has a fixed interest rate and an agreed repayment schedule, the borrower generally has more certainty about the size and timing of its regular payments.
However, those payments may remain due even when revenue decreases.
When Might a Sales-Based MCA Be More Suitable?
A sales-based arrangement may be worth considering for a business with regular qualifying card revenue and meaningful fluctuations in trading volume.
For example, a restaurant, pub or seasonal retailer may find that collections linked to sales are easier to manage than equal monthly instalments during quieter periods.
However, the business must still assess the overall financing cost and any minimum payment obligations.
When Might Fixed Monthly Loan Payments Be Better?
A conventional business loan may be more appropriate where the business values a defined repayment schedule, has predictable free cash flow and qualifies for financing at a competitive total cost.
A fixed monthly obligation may also be easier to integrate into long-term cash-flow forecasting.
Nevertheless, a loan is not automatically cheaper or more suitable.
Businesses should compare the actual rates, fees, security requirements, repayment periods and affordability of available arrangements.
TheBritish Business Bankidentifies conventional business loans among the alternatives businesses can consider when assessing merchant cash advances.
Are Fixed-Fee Merchant Cash Advances FCA-Regulated in the UK?
Not every commercial financing product falls within the Financial Conduct Authority's regulatory perimeter.
Many UK merchant cash advances are structured as purchases of future receivables rather than conventional regulated lending agreements.
For example, Square explicitly states that its UK Cash Advance product is not regulated by the FCA.
However, regulatory treatment depends on the substance and structure of the specific agreement and the activities involved.
The FCA's October 2026 work on SME access to finance explains that business lending of £25,000 or less to sole traders and small partnerships generally falls within the consumer credit regulatory perimeter.
Much lending to limited companies, higher-value business lending and certain alternative commercial financing activities falls outside it.
This distinction does not establish the regulatory status of every MCA.
Businesses should review the specific product documentation and, where relevant, check the provider's permissions using theFCA Financial Services Register.
An FCA-authorised payment services company may also offer or distribute financing products that fall outside the FCA's regulation of credit.
If a business is uncertain about the nature of its agreement or the enforceability of a contractual provision, it should obtain appropriate independent advice.
Source:FCA — Supporting SME Access to Finance.
Frequently Asked Questions
Is a fixed fee cheaper than sales-based deductions in a merchant cash advance?
They are not directly comparable. The fixed fee represents the financing cost, while the sales deduction percentage determines how collections are calculated. Many merchant cash advances use both simultaneously. Compare the full amount payable and the effect of deductions on operating cash flow.
Does a merchant cash advance have a fixed interest rate?
Many traditional UK MCAs use a fixed financing charge rather than conventional loan interest. Some express this cost as a factor rate. A factor rate is not an annual interest rate or APR.
What is a good MCA deduction percentage in the UK?
There is no universally appropriate percentage. A manageable deduction depends on the business's qualifying sales, profit margins, operating costs, existing financing and contractual minimums. Compare the percentage against realistic cash-flow forecasts rather than a generic benchmark.
Does a lower holdback rate mean cheaper financing?
No. A lower holdback percentage generally reduces the proportion of qualifying sales collected at a particular time, but it does not automatically reduce the total agreed financing fee. Depending on the offer, a lower percentage may accompany a higher fixed charge or a longer expected collection period.
Can the MCA fee increase if sales decline?
Under many fixed-fee arrangements, slower sales do not automatically increase the original agreed financing charge. However, additional obligations can arise under specific contractual circumstances, including default. The agreement must be checked for any relevant fees or remedies.
Are MCA deductions calculated before or after VAT?
This depends on the provider's definition of qualifying revenue. Square Cash Advance UK states that its percentage applies to gross qualifying card sales including applicable VAT and tips. Shopify Capital UK also includes applicable taxes in its sales calculation. Other providers may use different rules.
What happens if my business has no sales for a day?
Under some products, no qualifying sales means no automatic sales-based deduction for that day. However, agreements may impose minimum repayment obligations over longer periods. A day without collections does not necessarily remove other contractual obligations.
Does paying off an MCA faster save money?
Not automatically. Some fixed-fee programmes retain the agreed financing charge even when the business settles early. Check whether the provider offers a fee reduction, discount or other early-settlement adjustment.
Can I choose between a fixed fee and sales-based repayments?
Usually, that is not the choice being offered by a traditional MCA. The funding fee and sales deduction mechanism generally operate together. If you want predictable fixed monthly payments instead, compare suitable business loans or other commercial finance products.
Can my business get another MCA while one is outstanding?
Potentially, but existing financing obligations can affect eligibility, affordability and contractual permissions. Taking multiple advances can place significant pressure on revenue and should not be treated as a routine solution to repayment difficulties.
Compare UK Business Funding Options With Mehmi Financial Group
Understanding fixed financing fees and sales-based deductions is an important first step when evaluating merchant cash advances.
However, the most appropriate option depends on more than the headline funding amount.
Your business's revenue, operating expenses, card-processing history, existing financial commitments and intended use of funds can all influence which financing structures may be suitable.
Mehmi Financial Group is a Canada-based commercial financing brokerage serving eligible businesses in supported markets, including the United Kingdom, subject to applicable local requirements and third-party provider availability.
Businesses exploring short-term working capital or merchant cash advance arrangements can submit a commercial financing enquiry to discuss potential options and next steps.
Contact Mehmi Financial Group to Discuss Your UK Business Financing Requirements
Before enquiring, it may help to have your estimated funding requirement, recent monthly card turnover, existing financing obligations and intended use of funds available.
Mehmi Financial Group is not a bank or direct lender. Funding is provided by independent third parties where available, subject to eligibility, underwriting and final contractual terms. Mehmi Financial Group may receive commissions or referral fees for arranged financing. No approval, financing amount, rate or funding date is guaranteed. Business purposes only.
Conclusion: Understand Both the Fixed Fee and Sales-Based Deduction
Fixed fees and sales-based deductions are two interconnected parts of a UK merchant cash advance.
The fixed fee establishes the agreed financing cost. The deduction percentage determines how qualifying sales contribute towards satisfying that obligation.
A business with strong sales may complete its MCA more quickly, while slower trading may reduce automatic collections and extend the collection period.
However, the total financing cost does not necessarily decrease when the advance is completed earlier, and contractual minimum repayments may still apply.
Before accepting any merchant cash advance, establish the amount you will receive, the total you must remit, the percentage of revenue that will be collected and the circumstances in which additional obligations could arise.
The most appropriate financing option is not necessarily the one with the lowest fixed fee or the smallest deduction percentage. It is the one whose complete cost and collection terms your business can realistically support.