An underwriting fee covers the funder's cost of reviewing your bank statements, credit and business records. It may be a flat amount or a percentage, and it is often deducted from the funding along with other closing charges.
Some contracts list several small charges, such as underwriting, processing, ACH setup or UCC filing fees. Each one looks minor, but together they reduce what you receive while the payback stays the same.
Example: A $750 underwriting fee on a $50,000 advance at a 1.35 factor rate, repaid daily over 8 months, lowers what you receive to $49,250 and lifts the estimated APR from about 95% to about 100%.
Ask whether the fee applies even if you turn the offer down. Any underwriting fee is the funder's charge: Openbook Capital has no fee to apply and no upfront fee.