Calculators · Factor rate
Factor rates, in dollars
A factor rate is a multiplier, not an interest rate. Put in your advance and term, and see what every common rate actually costs side by side.
Slide the table sideways for cost of capital and APR.
| Factor rate | Daily payment | Total payback | Cost of capital | Approx. APR equivalent |
|---|---|---|---|---|
| 1.22 | $363 | $61,000 | $11,000 | 61% |
| 1.25 | $372 | $62,500 | $12,500 | 69% |
| 1.30 | $387 | $65,000 | $15,000 | 82% |
| 1.35 | $402 | $67,500 | $17,500 | 95% |
| 1.40 | $417 | $70,000 | $20,000 | 107% |
| 1.45 | $432 | $72,500 | $22,500 | 119% |
APR equivalents assume equal payments on business days and are shown only for comparison against loan offers. The shorter the term, the higher the APR equivalent looks for the same factor rate, even though the dollar cost is identical. That is why comparing advances on factor rate and total dollars is usually more honest than comparing on APR.
Reading an offer like a broker does
When an offer hits our desk we look at three things in order: total dollars of cost, daily payment against daily deposits, and only then the rate. Two offers can carry the same factor rate and be very different deals - a 1.30 over 6 months takes twice the daily bite of a 1.30 over 12. The table above makes that visible before you commit to anything.
One more thing worth knowing: most of the deals we place carry prepayment discounts, which turn the fixed payback into a sliding scale if you pay off early. If an offer you are holding does not mention prepayment terms, ask. The answer changes the real cost.
What is a factor rate?
A multiplier that sets the total payback on an advance. Borrow $50,000 at a 1.30 factor and you pay back $65,000, period. It is not an interest rate - it does not accrue over time, and the total never changes.
What is the difference between a factor rate and an interest rate?
Interest accrues on a declining balance over time, so paying early saves money automatically. A factor rate fixes the total cost up front regardless of timing. That makes an advance simpler to understand but different to compare - always compare total dollars out the door.
Is a 1.4 factor rate high?
It is the upper half of the normal range. Files with stacked positions, short time in business, or choppy deposits price there. If you are being offered 1.45 or higher as a first position with clean statements, get a second opinion - it costs nothing to check.
Can a factor rate be negotiated?
The rate comes from how funders read the file, so the real lever is the file itself: cleaner recent statements, paying down a stacked position, or waiting a month past a bad deposit stretch can each move pricing more than haggling will.
Related: full repayment calculator · what you could qualify for