MCA Factor Rate Calculator
This MCA factor rate calculator shows what your rate costs in dollars. Enter the advance and factor rate to see total payback and an estimated payment.
A 1.35 factor rate on a $50,000 advance means $67,500 repaid, so the advance costs $17,500 before any fees.
A factor rate is the number a funder multiplies your advance by to set the total payback. This merchant cash advance factor rate calculator shows what that rate costs in dollars, the payment, and an APR-style comparison. Enter your offer's numbers below.
What is a factor rate?
A factor rate is a fixed multiple applied to the advance amount. It's not an interest rate and doesn't change as you pay. The cost in dollars is the payback minus the advance.
A factor rate calculator turns a merchant cash advance offer into dollars. Multiply the advance by the factor rate to get the total payback. Subtract the cash you actually receive, then add any fees paid on the side. That is your dollar cost. The tool also shows it per dollar received, as a simple yearly cost, and as an estimated APR.
Calculator
Enter your numbers to see results.
Method: the estimated APR is the rate per payment that makes your payments worth the cash you received, times 252 for business-day debits or 52 for weekly debits.
Results are estimates. Funders set the actual terms, and every offer is subject to funder underwriting. Nothing you type is stored or sent; the page address holds your numbers so you can share them.
What does a 1.35 factor rate cost on a $50,000 advance?
Example only, with round numbers so you can check the math by hand. They are not typical terms and not a quote; the funder sets the real terms.
A $50,000 advance at a 1.35 factor rate, with $1,500 in fees taken out of the funding, no separate fees and 120 payments each business day on a 5-day debit week.
| Step | The math | Result |
|---|---|---|
| Total payback | 50,000 × 1.35 | $67,500.00 |
| Cash you receive | 50,000 − 1,500 in fees | $48,500.00 |
| Dollar cost | 67,500 − 48,500 | $19,000.00 |
| Cost per dollar received | 19,000 ÷ 48,500 | $0.39 |
| Daily payment | 67,500 ÷ 120 | $562.50 |
| Term | 120 ÷ 5 × 7 | 168 calendar days |
| Simple annualized cost | 0.3918 × 365 ÷ 168 | 85.1% |
| Estimated APR | 0.5812% per payment × 252 | 146.5% |
| Effective annual rate | (1 + 0.005812)252 − 1 | 330.8% |
The factor rate fixes the dollars: this advance costs $19,000 no matter how fast it's repaid, unless the contract offers an early payoff discount. The APR shows how fast that cost is charged. Load this example into the calculator to check each line, then swap in the numbers from your offer.
Have a real offer? Run its numbers in the calculator. If the cost works for your business, Apply now and we shop your file to funders whose programs fit. Each one sends its own terms in writing. Applying costs you nothing, and Afterfirst MCA charges you no fee.
Factor rate vs APR: which number should you compare?
Compare both. The factor rate tells you how many dollars an advance costs. The estimated APR tells you how much time you have to pay that cost, so the same factor rate over a shorter term carries a higher APR. Each offer below has $1,500 in fees taken out of the funding.
| Offer | Factor rate | Payments | Dollar cost | Daily payment | Estimated APR |
|---|---|---|---|---|---|
| Offer 1 | 1.35 | 120 | $19,000 | $562.50 | 146.5% |
| Offer 2 | 1.35 | 240 | $19,000 | $281.25 | 73.5% |
| Offer 3 | 1.30 | 80 | $16,500 | $812.50 | 192.5% |
Offer 3 has the lowest factor rate and the smallest dollar cost, yet the highest APR and the largest daily payment, because it is repaid fastest. Offer 2 costs the same dollars as offer 1 at half the daily payment. A lower factor rate saves dollars; a longer term eases daily cash. Set each daily payment against your deposits with the payment calculator before you choose.
What you enter
Every box is your input. Nothing is filled in for you, because offers differ too much for a starting number to mean anything.
- Advance amount (purchase price): the amount the offer says is being advanced.
- Factor rate: the multiplier on the offer, for example 1.3 is written as 1.3.
- Fees taken out of the funding: fees the funder deducts before the money reaches your account. Leave blank if none.
- Fees you pay separately: fees paid on the side, not taken from the funding. Leave blank if none.
- Payment schedule: daily (business days) or weekly, and how many days a week the funder debits.
- Payment amount or number of payments: enter one. The tool works out the other.
The formulas
Each result uses one plain formula. A is the advance amount, F the factor rate, D the fees taken out of the funding, O the fees paid separately, P the payment and N the number of payments.
- Total payback: T = A x F
- Cash you receive: R = A - D
- Dollar cost: C = T - R + O
- Cost per dollar received: C / R
- Number of payments: N = T / P, or payment: P = T / N
- Term in calendar days: daily schedule, N / (debit days per week) x 7; weekly schedule, N x 7
- Simple annualized cost: (C / R) x (365 / term in days)
- Estimated APR: find the rate r per payment period where R - O equals the sum, for k = 1 to N, of P / (1 + r)^k. Then nominal APR = r x periods per year, and effective annual rate = (1 + r)^(periods per year) - 1. Periods per year are debit days per week x 52 for a daily schedule, or 52 for a weekly one.
The APR step has no closed form, so the tool narrows r down by halving the search range until the two sides match to the cent. If N is not a whole number, the last payment is the smaller remainder.
Why a disclosure may show a different APR
State disclosure laws set their own estimated APR method, so an offer's disclosure can differ from this estimate. California's commercial financing disclosure rules are one example. Texas Finance Code chapter 398 covers commercial sales-based financing in Texas. Read the disclosure that comes with the offer, and ask the funder how it was worked out. To compare several offers side by side, use Compare offers. For the terms, see the MCA glossary.
How do you compare two factor rates that look close?
Factor rates often sit close together, so two offers can be a few hundredths apart and still cost very different dollars. The stated rate is figured on the advance. What you pay for is the cash that lands in your account, so divide the total payback by that cash. Call it the effective factor.
Sample figures, not a quote:
- Offer A: $40,000 at 1.30 with a $2,400 fee taken out at funding. $52,000 back for $37,600 received, an effective factor near 1.38 and $14,400 in dollar cost.
- Offer B: $40,000 at 1.34 with no fee. $53,600 back for $40,000 received, an effective factor of 1.34 and $13,600 in dollar cost.
The lower stated rate costs $800 more.
Run both through the calculator above to see how the term changes the APR estimate.
Why might your rate come in higher?
Funders price the risk they see in your bank statements. Each of these usually brings a smaller amount, a shorter term and a higher rate:
- A second or third open advance.
- An advance funded in the last month or so.
- A run of overdrawn days or returned items.
A clean month-to-date statement and a list of every current advance debit help a funder price the file without guessing.
What should you ask before you accept a rate?
- Is the fee taken out of the funding or billed on the side?
- Will any current balance be paid off out of this funding, and how much cash is left after that?
- What's the holdback or fixed debit, and how often does it run?
- Is there an early payoff discount, and is it written into the contract?
- Can you ask for a reconciliation if deposits drop?
To line offers up side by side, use Compare offers. For the definition, see factor rate.
FAQ
Is a factor rate the same as an interest rate?
No. A factor rate is a fixed multiplier on the advance, set once. The dollar cost doesn't shrink if you pay sooner, unless the contract offers an early payoff discount. That is why the tool turns it into dollars first.
Why do the simple annualized cost and the estimated APR differ?
The simple figure spreads the cost evenly over the whole term. The APR estimate counts each payment when it leaves your account. Money you pay back early is money you had for less time, so the APR estimate is usually higher.
Does using the calculator affect my credit?
It runs only in your browser. Nothing you type is stored or sent, and no one sees it. The page address holds your numbers so you can share them if you choose.
Can I use it for an advance I already have?
Yes. Enter the numbers from your contract. For more than one open advance, the Stacked payment calculator adds every debit together.
Is this an MCA repayment calculator tool?
Yes. Enter the advance and the factor rate, your MCA rate, to see the total payback and an estimated payment. The cost in dollars is the payback minus the advance.
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