Business Funding · Free Tool
Factor rate to APR calculator
Factor-rate products quote a flat multiplier instead of an interest rate, which hides the real cost. A 1.30 factor over a few months is not 30% a year, it is usually far more. Run your offer through the math.
Total payback = amount × factor rate. The APR is the true annualized cost of that payback schedule.
Why a factor rate looks cheaper than it is
With a factor rate, you owe the full cost the moment you sign, regardless of how fast you pay it back. The shorter the term, the higher the true APR, because you are paying that fixed cost over less time. That is the opposite of how a normal loan works.
Stuck in one already? Read: Factor rate vs APR, the one calculation that tells you if an offer is a trap.