The three-quotes rule: pricing startup costs credibly
Every use-of-funds table has a few numbers that came from a real quote and a few that came from a guess rounded to the nearest thousand. I could always tell which was which, and so could every lender who read it after me.
Quotes vs. guesses
A use-of-funds table is a list of promises: this is what the money will actually buy. For anything meaningful — equipment, leasehold improvements, signage, initial inventory — get at least three real quotes from real suppliers before you write a number down. Not because the highest or lowest matters most, but because three quotes prove the number came from the market and not from memory or hope. They also protect you from the opposite mistake: underpricing a cost because the one number you had in your head was out of date, or was a friend's rough estimate rather than something a supplier would actually sign.
This applies just as much to soft costs as hard ones. Legal fees to incorporate, an accountant's setup work, a first round of signage design — owners quote the oven and forget the invoice for getting the paperwork right. A lender reading a use-of-funds table with only hard costs on it will ask where the rest of the launch spend went, so account for it honestly rather than leaving it implied.
Why round numbers read as fiction
$50,000 for leaseholds. $25,000 for equipment. $10,000 for signage. Numbers that round that cleanly, across every line of a budget, tell an experienced reader the whole table was estimated in one sitting rather than priced against anything real. Real quotes come out uneven — $8,340, $22,875, $6,120 — because real costs are uneven. A budget that's suspiciously tidy invites the same skepticism as a story with every detail conveniently rounded off.
Contingency, done honestly
A contingency line isn't padding, and lenders don't read it that way when it's used correctly — it's an acknowledgment that even a well-quoted budget runs into surprises. A contingency of five to ten percent of hard costs, clearly labelled as such, reads as prudent. A contingency line that's actually hiding an unpriced item, or one so large it's absorbing costs you should have just gone and quoted, reads as exactly the evasion it is.
Dating and attaching the quotes
A quote is only as good as its currency. Attach the actual documents to your application, not just the totals, and make sure they're recent — a six-month-old equipment quote in a market where prices move is functionally a guess again by the time you apply. If a quote has lapsed, get it refreshed before you submit rather than leaving the lender to wonder whether the number still holds.
One suspiciously round number doesn't cost you the file. It costs you my trust in every other number on the page, and then I re-check all of them.
What happens when one cost looks invented
The moment one line in a use-of-funds table looks off — too round, too convenient, unsupported by a quote — a careful reader doesn't just flag that line. They go back and re-verify every other number in the budget, because a table that fabricated one figure has lost the benefit of the doubt on all of them. Pricing every line credibly the first time is cheaper than earning that scrutiny back.
Price it credibly, the first time
LenderReady builds your plan through a conversation — a use-of-funds table built from your actual quotes, with contingency handled the way a lender expects, not guessed at.
Build my planLenderReady is an educational service, not a lender, broker, or financial advisor. Lending criteria vary by institution and change over time; treat this as a starting point, not a guarantee.