Offered weekly pay if I drop four dollars a lead. Is anyone taking these deals

Had a version of this in 2020 and turned it down, and I've wondered ever since whether that was right.

Manager rang me Friday. Current deal is 51 on net30. He'll do 47 paid every Thursday for the prior week, no hold, and he was fairly open that they'd rather have the volume smoothed than pay me a lump on the 30th.

That's an 8% haircut for getting paid three weeks sooner. My gut says no because 8% is 8% and I'm not short. My head says my working capital is the entire constraint on how fast I can scale and this fixes it.

What I can't work out is what the deal tells me about them - is offering weekly a sign of a network that's healthy and flush, or one that's buying loyalty because it knows it needs it?

8% a month is about 150% a year. work out what that is as a loan and then tell me you're not short

Caveat: I've run it both ways for about three years, so this is experience rather than theory.

1. grindstone's maths is right but it is the wrong frame, because you are not borrowing 8%, you are borrowing 8% and removing three weeks of counterparty risk. Every week you are not owed money is a week a network cannot fold on you. I have been paid weekly by one outfit that then died owing me four days instead of five weeks, and that alone has covered the haircut several times over.

2. The real number isn't 8%, it's what you do with the money three weeks earlier. If your spend is capped by cash and you reinvest it, you need the reinvestment to return more than 8% over three weeks, which for most people here it comfortably does. If the money sits in an account, you've just paid 8% for nothing.

Marta_K has framed this correctly and I would add only that there is a third thing you are buying, which is predictability.

A weekly receivable of a known size is something you can plan against; a monthly one that has been four days late twice is not. The value of that is real even though it does not show up as a percentage anywhere, and it is the reason invoice factoring exists as an industry at rates considerably worse than 8%.

I would take the weekly, and I would keep one relationship on net30 so that you are not learning what a fifty-one dollar payout feels like only in hindsight.

One thing nobody has asked: is the 47 before or after their scrub, and is the scrub applied before or after the weekly cut-off?

On net30 a network has a month to reconcile and reverse. On weekly they have four days, which in practice means a lot of them run a separate clawback line that lands two weeks later. So you get 47 on Thursday and then a negative adjustment on a later Thursday, and the effective is neither 51 nor 47.

Get him to tell you in writing how reversals are handled on the weekly schedule. If he's vague, that's your answer about which kind of deal this is.

Weekly is good until the week they skip one. Then is very bad.

take it!! weekly changed everything for me, i went from testing one offer a month to like four. the 8% is nothing compared to the compounding

Took it, with the reversal question asked first - MetricsOverMagic was right to flag it. Answer was that clawbacks land as a line on the following Thursday, which is at least clean and at least in writing.

Three weeks in the effective is 46.1 against a headline 47, so the reversals are running about 2%. On net30 I never saw them separately because they were netted before I ever got a number, which is its own small lesson.

Still running one network on net30 like quietaccountant suggested. Mostly so I remember what it felt like.