# APR vs. Discount

## Understanding the Differences

- **APR (Annual Percentage Rate):** An annualized rate applied to each invoice based on how many days early you are paid ( **Days Paid Early / DPE**).

- _How it works:_ Invoices paid only a few days early cost less than invoices paid many days early at the same APR. This is best for recurring offers where invoice timing varies.

- _In the platform:_ Described as _"Best value for recurring offers; calculates individual rates per invoice based on how early you are getting paid._"

- **Discount:** A fixed, flat percentage taken off the invoice's face value, regardless of when it is paid.

- _How it works:_ A 2% discount on a $10,000 invoice always costs $200. This is best for one-time offers when you want a simple, uniform cost.

- _In the platform:_ Described as _"A flat rate applied to each invoice in your offer._"

## Comparison Matrix

|     |     |     |
| --- | --- | --- |
| **Feature** | **APR** | **Discount** |
| **Based on** | Days paid early (DPE) per invoice | Invoice face value |
| **Cost per invoice** | Varies by due date | Same percentage of amount |
| **Typical use** | Recurring / ongoing offers | One-time or uniform costing |
| **Estimated amount** | Reflects blended DPE across invoices | Straight percentage of total |

**Note:** The review screen shows estimated amounts using your selected rate type. You can compare both on the review step before submitting.

## Managing Rate Types in Build Offer

## Switching Rate Types

On the rate step, use the **Rate Type** dropdown to switch between APR and Discount. Changing the rate type will:

- Update the suggested **Trending Rate** and **Express Accept** values for that type.
- Change which pricing strategies are available.

_Note: Your customer's market must support the rate type you choose. If an option is unsupported, it will not appear in the dropdown._

## Express Accept

Suggested rates are tied to your selected rate type and frequency. For one-time offers using **Discount**, Express Accept uses a rate path optimized for fast acceptance at that specific discount level.

## Fixed Rate and Variable Rate Divisions

These divisions use rates set by the market—not your APR or Discount entry. The rate type selection applies only to **Name Your Rate** divisions.

## Quick Tips

- **Choose APR** when you accelerate invoices with a wide range of due dates and want the cost to scale dynamically with timing.
- **Choose Discount** when your team models internal early-pay costs in simple "percent off invoice" terms.