Free Tool
Factor Rate Calculator
See the total payback amount on a merchant cash advance before you sign anything.
This is an estimate for educational purposes, not an offer of funding. Factor rate is a fixed multiplier, not an interest rate or APR, and isn’t directly comparable to one. Actual payment frequency, term, and any additional fees are set by the funding provider and confirmed in your offer.
How the math works
A merchant cash advance isn’t priced with an interest rate the way a loan is. Instead, the provider applies a factor rate — a fixed decimal, usually between 1.10 and 1.50 — directly to the advance amount to determine the total amount owed.
Total payback amount = advance amount × factor rate. For example, a $100,000 advance at a 1.30 factor rate means $130,000 total is owed — regardless of how long it takes to repay.
That total is usually collected through small daily or weekly payments, often as a percentage of your card or bank sales. Because repayment speed depends on your sales volume, MCAs don’t have a fixed term the way a loan does — the term above is only an estimate.
A factor rate is not the same as an interest rate or APR and the two aren’t directly comparable without doing the underlying math yourself. Want the fuller explanation? Read MCA Factor Rates Explained or Factor Rate vs. APR.
Understand your offer
Before accepting any funding offer, understand exactly what you’re looking at.
| Advance amount | The amount of future receivables sold to a funding provider in exchange for upfront capital. |
|---|---|
| Factor rate | A fixed multiplier (e.g., 1.30) applied to the advance amount. Not an interest rate or APR. |
| Total payback amount | Advance amount × factor rate — the full amount repaid over the agreement. |
| Payment frequency | Typically daily or weekly, often as a percentage of sales. |
| Estimated duration | Not fixed like a loan term — depends on sales volume and payment structure. |
| Fees | Some providers charge origination or administrative fees beyond the factor rate. Ask for these in writing. |