Double Dipping (also known as “Interest on Interest”, “Fees on Fees”, or “Interest Acceleration”) is a common industry practice that can cost you tens of thousands of dollars over the lifetime of a partnership with the wrong lender or cash advance provider. Double Dipping is most prevalent in short-to-medium term loans and cash advances.
Double Dipping occurs when you refinance or renew your funding with your current funding provider and the proceeds from the new loan or advance (including any unpaid and un-accrued interest or fees) is used to pay off the balance from the previous contract, but with one important twist: your small business pays double for the exact same money. Double Dipping is a complex concept, but it is critically important for small business owners to understand and appreciate how it impacts your total cost of capital when you renew. And we strongly believe that you should know whether your funding provider Double Dips BEFORE you take your first loan or cash advance.