Guides
What it costs
Factor rates in dollars rather than percentages, what to compare between two offers, and whether paying early saves you anything.
One application, every lender we work with
Find out what you qualify for.
Eleven questions, about two minutes. The lenders who fund your industry and your state see it; you compare their offers and take one, or none.
Submit an application- Won't affect your credit
- Free, no obligation
- Up to $500K
13 guides
What factor rate should you expect on a merchant cash advance?
Can you save money by paying off a merchant cash advance early?
What does business funding actually cost, in dollars?
The APR behind a factor rate
A 1.3 factor repaid daily over four months is about 160 percent APR. Over eight months, about 80. Same fee, different speed.
The fees around the rate
An origination fee of a few percent, ACH and underwriting fees, and sometimes a broker fee. On a small advance they outweigh the factor.
The daily payment, computed
Total repayment divided by business days in the term. $65,000 over 126 days is $516 a day.
$50,000, four ways
$15,000 on an advance over six months, or $12,000 to $17,000 on equipment spread over five years. Same money, different jobs.
Short term or long term
Longer usually costs more in total and less per week. The right answer is the longest term whose total you can stomach.
The price of equipment money
Close to bank pricing for a strong file, into the twenties for a startup or a low score. The machine is why.
Lower factor, not always cheaper
A 1.2 with high fees and a four-month term can cost more per month than a 1.3 over ten. Compare in dollars.
Worse than advertised
Files are graded A to D on deposits, balance and history. The advertised rate is the A grade. Most files are not A.
What is negotiable
The factor moves a little. The term, the payment frequency, the fees and the amount move more. Ask before signing, never after.
The renewal trap
A $20,000 renewal that retires a $14,900 balance puts $5,100 in your account and charges the factor on all $20,000.
Other guides
- If you need money this week
- Something broke
- Whether you'll qualify
- The best options, compared
- If you already have an advance
- Applying without getting burned
- Merchant cash advances, explained
- Working capital, explained
- Equipment financing, explained
- Lines of credit, explained
- Buying, expanding, opening
- Difficult situations
- Why banks decline, by industry
One application, every lender we work with
Find out what you qualify for before you need it.
Eleven questions, about two minutes. You see offers side by side and take one, or none.
- Won't affect your credit
- Free, no obligation
- Decisions usually inside 24 hours
- Up to $500K