Factor rate to APR calculator
A factor rate tells you the total you'll pay back. It doesn't tell you what the money costs per year. Enter an offer below to see both.
How the calculation works
The calculator finds the periodic rate at which your payments exactly repay the cash you actually received, then annualizes it. This is the same idea behind the APR on a loan disclosure. Three inputs move the result the most:
- Term. The same factor fee over fewer months means a higher annual cost. Halving the term roughly doubles the APR.
- Fees deducted at funding. These shrink the cash you receive without shrinking what you repay.
- Payment frequency. Daily payments return the provider's money fastest, so you hold the full amount for less time on average.
How to read the result
APR isn't the only number that matters. A short emergency advance can have a very high APR and still be worth it, if the alternative is losing a contract. What APR does is let you compare offers that are structured differently: an MCA against a working capital loan, or a line of credit. Always look at it next to total dollar cost and the size of each payment against your daily deposits.
Before you accept, add any payments you already make on other advances to the new payment. If the total is more than a comfortable share of an average day's deposits, the offer is too big, whatever its APR.
For the full picture on contract terms, reconciliation and stacking, read our merchant cash advance guide.