Factor rate to APR calculator
Convert a merchant cash advance or short-term loan factor rate into total cost and an estimated APR.
APR solved from the daily payment stream over 21 business days a month. Weekly schedules give a slightly lower APR for the same factor.
A factor rate multiplied by the amount borrowed gives the total repayment. A $50,000 advance at a 1.3 factor repays $65,000. Spread over 9 months of daily payments that is roughly an 80% APR; the same factor over 18 months is about 40% APR. The shorter the term, the higher the APR for the same factor rate.
How to use this calculator
Advance amount
What you receive before any origination fee is deducted.
Factor rate
Usually 1.1 to 1.5. Multiply by the amount to get total repayment.
Repayment period
How many months the daily or weekly payments run. Shorter periods mean a higher APR.
Origination fee
Often 2% to 5%, deducted from proceeds. It increases the effective APR.
Frequently asked questions
What is a factor rate?
Is a 1.2 factor rate good?
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