Factor Rate to APR Calculator
A factor rate tells you the total you repay. This calculator shows what that works out to per year. A $100,000 advance at a 1.30 factor, repaid weekly over 12 months, is roughly 54% APR.
- Total payback
- $130,000
- Cash you receive
- $100,000
- Cost of financing
- $30,000
- Each payment
- $2,500.00
- Number of payments
- 52
- Cost per dollar received
- 30.0¢
An estimate, not an offer. Assumes equal payments. Real revenue-based financing collects a share of sales, so payments and the final rate vary.
How to read the result
- Total payback is what leaves your account. Advance × factor rate.
- Cash you receive is the advance minus any fee taken out up front.
- Approximate APR is the yearly cost of the money, counting how long you actually have it.
Change the payback period and watch the APR. The dollars stay the same. The yearly rate climbs as the period gets shorter.
How the math works
- Total payback = advance × factor rate.
- Each payment = total payback ÷ number of payments.
- We find the rate per payment at which all those payments are worth exactly the cash you received.
- We multiply that rate by the payments in a year: 252 for daily, 52 for weekly, 12 for monthly.
That gives a standard nominal APR. Our guide to factor rate vs APR walks through a full example and a conversion table.
What to do with the number
Use it to compare offers that quote cost in different ways. Then check the dollars: if the financing costs $30,000, will the money earn more than that? See revenue-based financing for when that trade makes sense.
Common questions
How do you convert a factor rate to APR?
Multiply the advance by the factor rate to get the total payback. Divide that by the number of payments to get each payment. Then find the rate per payment at which those payments are worth exactly the cash you received, and multiply by the number of payments in a year.
Why is the APR so much higher than the factor rate?
A factor rate charges a fixed cost on the full advance, even though you start paying it back right away. On average you hold only about half the money over the payback period, so the yearly cost of the money you actually have is much higher.
Is this the APR a funder would disclose?
It is an estimate. Funders in states with disclosure laws calculate APR under that state's rules, and revenue-based financing has variable payments, so the true rate is only known once the payback is complete.
Does a shorter payback period cost more?
The dollars are the same. The APR is higher, because you pay the same fixed cost for less time with the money.