# APR vs. Discount

Written by Lauren Bock  
June 3, 2026

When setting a rate for **Name Your Rate** divisions, you can choose whether to submit your offer as an **APR** or a **Discount**. While both options express the cost of early payment, they use different math to calculate that cost.

## Understanding the Rate Types

- **APR (Annual Percentage Rate):** An annualized rate applied to each invoice based on its specific **Days Paid Early (DPE)**.

- _How it works:_ Invoices paid only a few days early cost less than invoices paid many days early at the exact same APR. This is ideal for recurring, ongoing offers where invoice timing varies.
  
  - _Platform description:_ _"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 face value, regardless of how many days early you are paid.

- _How it works:_ A 2% discount on a $10,000 invoice always costs $200. This is ideal for one-time offers when you prefer a simple, uniform, and easily predictable cost.
  
  - _Platform description:_ _"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 depending on the due date | Same fixed percentage of the amount |
| **Typical use** | Recurring / ongoing offers | One-time or uniform costing |
| **Estimated amount** | Reflects a blended DPE across invoices | A straight percentage of the total |

**Note:** The review screen shows estimated amounts using whichever rate type you selected. You can toggle and compare both on the review step if you are unsure which fits your cash-flow planning better.

## Switching Rate Types in Build Offer

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

- **Fixed Rate and Variable Rate Divisions:** These divisions use rates set directly by the market, not your manual APR or Discount entry. The rate type selection applies exclusively to **Name Your Rate** divisions in a mixed offer.

## Quick Tips

- **Use APR** when you accelerate invoices with a wide range of due dates and want the total cost to scale dynamically with timing.
- **Use Discount** when your team models internal early-pay costs in simple, straightforward "percent off invoice" terms.
- **Align your selection** with how your finance team models early-pay costs internally.