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Convert a factor rate to an estimated APR

Advances are priced with a factor rate, which can't be compared with a loan's interest rate. Enter the numbers from an offer to see the total payback, what you actually receive and an estimated APR.

The amount in the offer, before fees.

For example 1.35 means $1.35 repaid for each $1 advanced.

Origination or other fees taken out of what you receive. Use 0 if none.

Payment frequency

How long you expect repayment to take.

Estimated APR

122.0%

Estimate, not an offer

Total payback
$70,000
Cost of financing
$20,000
Amount you actually receive
$50,000
Payment per business day (147 payments)
$476.19

Cost of financing is total payback minus what you receive. A factor rate is not an interest rate.

How the estimate works

  • Total payback is the advance amount times the factor rate.
  • What you receive is the advance amount minus any fees withheld at funding.
  • Payments are spread evenly: about 21 business-day debits a month, or about 4.33 weekly debits a month.
  • The estimated APR is the yearly rate at which those payments repay what you actually received (an internal rate of return), multiplied by the number of payments in a year.

Real advances that take a share of sales don't have a fixed term. If sales slow, the term gets longer and the APR falls; if sales rise, it gets shorter and the APR rises. Try a few terms to see the range. This is an estimate, not an offer, and doesn't replace the provider's disclosure.

California and New York require providers to show an estimated APR on covered offers; several other states require a total-cost disclosure. See working-capital advances: cost and risks, or compare a business line of credit or a term loan.