Calculator
Factor Rate Calculator: What an Advance Really Costs
Turn any merchant cash advance or revenue-based offer into plain numbers: total payback, the daily or weekly payment, the dollar cost, and an estimated APR you can compare against a loan.
Factor Rate Calculator
Enter the terms from your offer. Results update as you type.
Typically 1.15 to 1.55
Taken out of the funds you receive
Shows the payment as a share of your monthly deposits
Illustrative estimate, not an offer. The APR estimate assumes fixed payments on a set schedule starting right away, with fees deducted from the funds you receive. A holdback that flexes with sales, early-payoff discounts or different fees will change the result.
How Do You Calculate a Factor Rate?
Multiply the advance by the factor rate to get the total payback, then subtract the advance to get the cost. A $50,000 advance at a 1.30 factor rate means $65,000 repaid and $15,000 in cost. Divide the payback by the number of payments for the payment amount. The cost does not change with time, so a shorter term means a higher annual percentage rate.
How to Use the Calculator
Take the numbers straight from the offer in front of you. You need four: the amount advanced, the factor rate, the repayment term and any origination or underwriting fee. Pick daily or weekly payments to match the contract, and add your monthly revenue if you want to see how much of your deposits the payment will take.
The calculator returns the total payback, the dollar cost, the payment, and two annual figures: a simple annualized cost and an estimated APR. The APR is the one to compare against a bank loan or line of credit, because it accounts for the fact that you start paying the advance back almost immediately.
The Math Behind a Factor Rate
A factor rate is a multiplier, not an interest rate. You multiply the advance by it once and that is what you owe, no matter how long repayment takes.
Because the cost is fixed in dollars, the term decides the annual cost. The same $15,000 spread over a shorter period is far more expensive in APR terms, even though the check you write is identical.
Same Factor Rate, Different Terms
| $50,000 at 1.30 | Daily payment | Monthly equivalent | Simple annual cost | Estimated APR |
|---|---|---|---|---|
| 6 months | $500.00 | $10,833 | 60% | 109% |
| 9 months | $333.33 | $7,222 | 40% | 73% |
| 12 months | $250.00 | $5,417 | 30% | 55% |
Illustrative, before fees. Assumes 260 business-day payments a year. For the full conversion method see factor rate vs APR.
What Sets the Factor Rate You Are Offered
Funders price an advance on risk, and the risk is read almost entirely from your business bank statements. The files that get the lowest factor rates tend to share the same traits:
- Consistent deposits. Months that look like each other matter more than one big month.
- Healthy average daily balance. A cushion in the account tells the funder a payment will clear.
- Few or no NSFs and negative days. Returned items are the fastest way to a higher rate. See how NSFs affect funding.
- No existing positions, or few. A second or third advance is priced higher than a first. See second position MCAs.
- Time in business and industry. Longer history and lower-risk industries price better.
Reading an Offer Before You Sign
Three questions separate a fair advance from an expensive one:
- What do I actually receive? Fees taken from the funding raise the true cost. A $50,000 advance with a 2% fee puts $49,000 in your account, and that moves the estimated APR on the 8-month example from roughly 80% to about 89%.
- Is there an early-payoff discount? On a pure factor rate, paying early saves nothing unless the contract says so.
- Can I carry the payment in a slow month? Enter your revenue above. If the payment takes a double-digit share of deposits, ask for a longer term or a smaller amount.
If you qualify for a term loan or line of credit, run the same amount through the business loan payment calculator and compare, or use the funding comparison tool to see every option side by side.
Typical Merchant Cash Advance Factor Rates in October 2026
| Borrower profile | Typical factor rate | Typical term | Approximate APR equivalent |
|---|---|---|---|
| Strong: 2+ years, 650+ credit, $50K+/month deposits, no positions | 1.11 – 1.20 | 9 – 18 months | 20% – 45% |
| Standard: 1+ year, 600 – 649 credit, $20K+/month | 1.20 – 1.32 | 6 – 12 months | 40% – 80% |
| Weaker: 6 – 12 months, 500 – 599 credit, 1 – 2 existing positions | 1.32 – 1.45 | 4 – 8 months | 80% – 150% |
| Second or third position | 1.40 – 1.50+ | 3 – 6 months | 150% + |
| Reverse consolidation | 1.25 – 1.40 on the new money | 6 – 12 months | Lower effective cost by replacing stacked daily payments |
Factor rates are not tied to Prime, so September’s Fed hike did not move them directly; they are set by the funder’s read of your deposits, credit, time in business and existing positions, and by the term. A shorter term at the same factor rate is a much higher APR, which is the single most misunderstood thing about MCA pricing.
What a $100,000 Merchant Cash Advance Costs
| Factor rate | Total payback | Cost of capital | Daily payment (6 months, 126 days) | Weekly payment (9 months, 39 weeks) |
|---|---|---|---|---|
| 1.15 | $115,000 | $15,000 | $913 | $2,949 |
| 1.25 | $125,000 | $25,000 | $992 | $3,205 |
| 1.35 | $135,000 | $35,000 | $1,071 | $3,462 |
| 1.45 | $145,000 | $45,000 | $1,151 | $3,718 |
Cost of capital on a $100,000 advance, by factor rate
Origination fees of 1% – 5% are usually deducted from the funded amount and raise the true cost further.
Compare the same $100,000 as a line of credit or term loan in the business loan payment calculator, and read factor rate vs APR for the conversion.
What Determines the Factor Rate on Your Merchant Cash Advance
- Average monthly deposits and their consistency over the last three months; steadier deposits earn lower factors.
- Time in business: two years or more moves most files into the 1.11 – 1.25 range.
- Personal credit: less important than for a loan, but 650+ still prices better than 550.
- Existing positions: each open advance raises the factor and shortens the term.
- Industry: restaurants, trucking and construction are priced higher than medical and professional services.
- Term: funders trade a lower factor for a shorter term, which can raise the APR; ask for both numbers.
- NSFs and negative days: more than three to five in 90 days raises the factor or kills the offer.
Factor Rates Explained
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Common Questions
Is a factor rate the same as an interest rate?
No. A factor rate is a one-time multiplier applied to the advance. Interest accrues on a declining balance over time. A 1.30 factor rate is not 30% a year; depending on the term, it can work out to an APR well above 50%.
What is a good factor rate for a merchant cash advance?
Market ranges typically run from about 1.15 to 1.55. Rates near the bottom go to businesses with long history, consistent deposits, a healthy balance and no existing advances. Newer files, NSFs or stacked positions push the rate up.
Does paying off an MCA early save money?
Only if the contract includes an early-payoff discount. With a straight factor rate the payback amount is fixed, so paying early saves nothing unless a discount is written into the agreement.
How is the estimated APR calculated?
The calculator treats the offer like a loan with fixed payments starting immediately, finds the periodic rate that makes those payments equal to the net funds you receive, and annualizes it. That is why fees and shorter terms raise it.
What is a typical MCA factor rate?
In October 2026, 1.11 to 1.20 for strong files (two or more years, 650+ credit, no existing positions), 1.20 to 1.32 for standard files, 1.32 to 1.45 for weaker files and 1.40 to 1.50 or more for second and third positions. Factor rates are not tied to the prime rate.
How much does a $100,000 merchant cash advance cost?
At a 1.25 factor, $25,000: total payback of $125,000, which over six months of daily payments is about $992 a business day, or about $3,205 a week over nine months. At 1.35 the cost is $35,000 and at 1.45 it is $45,000, before origination fees.
See What You Qualify For
One application, about five minutes, soft pull only. A funding specialist comes back with the offers you qualify for — and explains every term before you sign.
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