MCA Factor Rate Calculator

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How to calculate a factor rate offer

Multiply the advance amount by the factor rate to find total payback. Subtract the advance from payback to find the cost from the factor alone. Fees withheld upfront reduce the cash your business receives.

• Total payback = advance × factor rate.
• Net cash received = advance − withheld fees.
• Cost including withheld fees = total payback − net cash received.
• Equal-payment estimate = total payback ÷ payment count.

This model assumes upfront fees are withheld from proceeds and the factor determines the full payback. It does not include additional charges, payoff of an existing balance, or later adjustments. Check the actual agreement.

Example: $50,000 at a 1.30 factor

These are illustrative numbers, not a quote. A $50,000 advance multiplied by 1.30 gives $65,000 in total payback. With $1,500 withheld in fees, the business receives $48,500. The difference between payback and cash received is $16,500. Dividing $65,000 into 130 equal payments gives $500 per payment.

Is a 1.30 factor rate the same as 30% APR?

No. The factor describes a multiplier on the advance; it does not express an annualized rate. APR depends on timing, payment amounts and fees. A factor alone cannot tell you APR. The Federal Reserve explains that factor rates and APR are different measures in its overview of small-business credit.

Daily versus weekly payments

Use the exact number of payments in the proposed schedule. Do not multiply months by 30 if collections happen only on business days. For revenue-based collections, an equal-payment result is only a comparison scenario; actual collections and timing may differ.

Then use our business funding payment calculator to compare the proposed payment with your operating cash flow. A lower payment does not necessarily mean lower total cost.

Compare two offers on the cash you actually receive

Enter your own figures in our side-by-side offer comparison →

A lower factor can still leave you with a higher dollar cost if more fees are withheld. Compare net proceeds, total payback and payment timing together.

Example A has a lower factor but provides $4,000 less cash and costs $1,500 more in dollars relative to cash received. Neither example establishes APR or affordability: payment dates and other contract terms still matter.

What if an existing advance is paid off from the proceeds?

The calculator subtracts withheld fees, but it does not model refinancing a current obligation. Keep the old payoff separate from fees. For example, $50,000 minus $1,500 in fees and a $20,000 existing payoff leaves $28,500 in new cash. The payoff retires an old balance; it is not all a new financing fee.

Use our guide to funding with existing advances to organize current balances and compare overlapping payments before reviewing another offer.

Questions to ask before accepting an offer

• How much will arrive in my bank account after every deduction?
• What is the total dollar payback, including charges outside the factor?
• When and how often are collections made?
• What happens to collections if revenue falls?
• Does early payment reduce the amount owed, and where is that written?

If you already have financing, use our existing advances guide and prepare the funding document checklist.

By Loan Sweet Loan · Updated October 5, 2026. Educational, AI-assisted content. About our guides.