Estimate your monthly payment and total cost — or convert a merchant cash advance factor rate into the true APR so you can compare offers honestly.
Estimate only, based on standard amortization. Actual payments depend on the funder and your terms.
Estimated APR via the payment schedule (IRR). A factor rate is a flat multiplier, so the same factor costs far more when repaid quickly. Estimate only — confirm exact terms with an advisor.
What is a factor rate — and why it's not an interest rate
Merchant cash advances and some revenue-based funding aren't quoted as an interest rate. They use a factor rate — a flat multiplier on the amount advanced. Borrow $50,000 at a 1.4 factor and you repay $70,000, no matter how fast you pay it back. Because the multiplier doesn't change with time, a factor that looks small can translate into a very high APR once you account for daily or weekly repayment over just a few months.
Why APR is the number that matters
APR normalizes cost to a yearly figure, so you can compare a merchant cash advance against an SBA loan, a line of credit, or a working capital loan on equal footing. As a reference, SBA 7(a) and SBA Express run about 10.5%–14.5%, equipment financing 6%–18%, and working capital loans 8%–30% — while a factor-rate advance can land well above all of them.
Get a real comparison
Fundmerica is a business financing marketplace, not a lender. One application matches you against 75+ banks, SBA lenders, credit unions, and alternative funders with a soft credit pull — so you can see lower-cost options side by side instead of accepting the first factor-rate offer in front of you.
Frequently Asked Questions
What is a factor rate?
A factor rate is how merchant cash advances and some revenue-based funding are priced. Instead of an interest rate, you multiply the amount advanced by the factor (e.g., $50,000 × 1.4 = $70,000 total payback). Because it's a flat multiplier, it hides the true annualized cost — which is why this tool converts it to an APR.
Why is a factor rate's APR higher than the factor suggests?
Because you repay the full fixed payback amount quickly — often daily or weekly over a few months — the effective APR is far higher than the factor implies. The factor alone doesn't account for how fast you repay.
Are these calculations exact?
They're estimates for comparison. Actual offers depend on the funder, your business, and the exact payment schedule. Use the numbers to compare options, then confirm real terms with a funding advisor.
What's a typical business loan APR?
It varies by product: SBA 7(a) and SBA Express run about 10.5%–14.5%, equipment financing 6%–18%, lines of credit 8%–24%, and working capital loans 8%–30%. Merchant cash advances, expressed as factor rates, often work out to much higher APRs.
How do I get a lower-cost offer?
Compare. Fundmerica is a business financing marketplace that matches one application against 75+ funding sources with a soft credit pull, so you can see lower-cost options side by side instead of accepting the first factor-rate offer you're shown.
See real offers — no factor-rate surprises
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