Calculator
Factor rate to APR converter
Turn a merchant cash advance or revenue-based offer into a number you can compare against an ordinary loan.
The APR here is a true internal rate of return: the rate at which the present value of your daily remittances equals what actually reached your account, annualized over 252 business days. It is not a regulated disclosure, and your real repayment period may differ from your estimate — but it is the number that makes an advance comparable to a term loan, which is the whole point.
Why a factor rate cannot be compared to anything
A factor rate is a flat multiplier: 1.35 on $50,000 means $67,500 owed. It contains no information about time — and time is what determines whether a fee is cheap or ruinous. The identical 1.35 factor is roughly 46% annualized over eighteen months and roughly 135% over six.
The number to argue about
Once you have an APR estimate, the useful question is not whether it is high. It is whether the thing you are buying with the money returns more than that over the same period. A 90% annualized cost on capital that turns a $200,000 contract is defensible. The same cost covering a recurring shortfall is not.
Before you sign an advance
- Ask for the total dollar payback, in writing. Every legitimate funder will give it.
- Ask whether early repayment reduces what you owe. Usually it does not.
- Ask what happens if revenue falls — find the reconciliation clause and read it.
- Check for a confession of judgment. If there is one, walk.
- Read merchant cash advances in full first.