AmiSight 4/15: Simple Doesn't Mean Safe: The Hidden Cost of Easy Financing
- Ami Kassar
- Apr 15
- 1 min read
An entrepreneur reached out to me yesterday about a line of credit offer she had received. On the surface, it sounded simple enough: a 4% fee, weekly interest of 1.04%, and a weekly payment. Clean. Easy to understand. Maybe even appealing.
But when we slowed it down and calculated the actual cost of the capital, the effective interest rate was close to 72%.
That’s the danger with offers like this. The terms are presented in a way that feels simple and manageable, but simplicity can sometimes hide just how expensive the financing really is.
Business owners need to be very careful with products like these. Before signing anything, take the time to understand the true cost, how the payments work, and what the total repayment will actually look like.
And just as important, check your alternatives.
Bottom line: Simple doesn’t always mean safe. The easier a financing offer looks, the more important it is to dig into the details.
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