Guide
The charges that are not the service fee or the margin
Updated
Two providers quoting the same service fee and the same margin can cost meaningfully different amounts over a year. The difference lives in charges that never appear in a headline, and every one of them is negotiable before signature and immovable afterwards.
The minimum fee
Most agreements set an annual minimum. Where your turnover does not generate enough service fee to reach it, you pay the minimum anyway. For a business with a seasonal pattern or a quiet year, that turns a variable cost into a fixed one exactly when it hurts.
Enter yours in the calculator and watch the total stop moving as turnover falls. That flat line is the risk you are accepting, and it should be sized against your worst plausible year, not your forecast.
Refactoring, which prices your ledger ageing
Invoices unpaid beyond an agreed age are refactored, meaning they attract a further charge or are recoursed back to you. It is a reasonable protection for the provider and it means a lengthening ledger increases the cost of your facility with no rate changing at all.
Ask at what age it bites and at what rate. Then compare that against your actual debtor days rather than your terms, because the two are rarely the same number.
Audit and transaction charges
Providers audit the ledger periodically and usually charge for it. Same-day payments out are typically charged per transaction. Neither is large individually; together, on a facility drawing weekly, they are a real annual number.
Ask how many audits a year, what each costs, and whether BACS payments are free where CHAPS is not.
The cost of leaving
This is the one to settle first, because it is the one you will care about most and can do nothing about later. Ask the contract term, the notice period, and what early termination costs.
A twelve month term with three months' notice is a fifteen month commitment. If the facility is not working after six, that distinction decides whether you are stuck for nine months or free in three.