2 min read
Definition
Annualised cost takes the charge for a short period and expresses it as an annual rate, so a 2%-a-month or 4%-per-invoice cost can be compared with a per-annum loan rate. It is how you unmask the true expense of cash advances, invoice finance and short bridges.
In plain terms
A small percentage over a few weeks can be a big percentage over a year — annualising shows you which.
Why it matters for your company
Always annualise short-term costs before comparing them with a loan. See per annum and effective annual rate.
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Read →Funding for UK limited companies
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