---
title: "Merchant Cash Advance Calculator | Factor Rate to APR"
url: "https://www.fundbetter.com/merchant-cash-advance-calculator/"
description: "Convert a factor rate into an effective APR. Enter your advance, factor rate and payoff time to see the daily remittance, total cost and what it works out to annually."
---

# Merchant Cash Advance Calculator

Turn a factor rate into an effective APR, so you can compare an advance against a loan.

 [See what you qualify for](https://www.fundbetter.com/apply/) [786-882-2705](tel:+17868822705) Show the full payment schedule

| Day # | Remittance | Still owed |
| --- | --- | --- |
| Enable JavaScript to build the schedule. Your payment and total cost are already worked out. | | |

## What a factor rate actually costs

A 1.35 factor on $50,000 means you repay $67,500. The $17,500 on top is the entire cost, fixed the day you sign.

Spread over 6 months of business days, that is $519.23 leaving your receipts every day you trade, and an effective APR of about **126%**. The daily number is the one your cash flow feels; the APR is the one that lets you compare this against a loan.

Most calculators will not give you that number, because a factor rate has no time in it and an APR is nothing but cost over time. Working it out takes solving for the rate that would produce the same payments, which is what the tool above does.

## Paying it off faster raises the APR

This is the part that catches people. Stretch the same $50,000 advance to twelve months and the APR falls to roughly 63%, but you still repay $67,500. Clear it in three and the APR roughly doubles, and you still repay $67,500.

The dollars never move. Only the rate does, because the rate is the cost spread across however long you take. So use the APR to compare an advance against a loan, and use the total to decide whether the advance is worth taking at all.

## When an advance is still the right call

An advance is the most expensive funding we offer, and we would rather tell you that than have you find out. It is priced for two things a cheaper product cannot do.

**Speed.** Money can reach your account in as little as 24 hours, against days or weeks elsewhere. If a supplier window closes on Friday, an APR comparison against a loan you cannot get in time is not a real comparison.

**Approval.** We look at card volume more than credit, so an advance starts around a 520 personal credit score where [our long-term business loans](https://www.fundbetter.com/business-loans/long-term-business-loans/) start at 700. And because repayment is a share of receipts rather than a fixed bill, a slow week costs you less automatically.

If you can wait a few days and you qualify, [a short-term business loan](https://www.fundbetter.com/business-loans/short-term-business-loans/) or [a line of credit](https://www.fundbetter.com/business-loans/business-lines-of-credit/) will almost always cost less. If you bill other businesses rather than taking cards, [invoice factoring](https://www.fundbetter.com/business-loans/invoice-factoring/) is cheaper still. We will tell you which of those are open to you before you take an advance.

## What your offer depends on

Card and deposit volume is the main input, which is why [a merchant cash advance](https://www.fundbetter.com/business-loans/merchant-cash-advance/) weighs $15,000 a month in card sales more heavily than a credit score. At FundBetter most approvals start around six months in business and a 520 personal credit score, and advances run from $5,000 to $5 million. Steadier volume supports both a larger advance and a better factor rate.

One number to ask about that this calculator cannot guess: the holdback, the share of each day's card sales routed to repayment. It commonly runs between 5 and 20 percent, and it decides how fast the advance clears and how much cash is left for payroll in the meantime.

## Questions about factor rates and APR

 How do you convert a factor rate to an APR?

You cannot do it with arithmetic alone, because a factor rate has no time in it. Work out the total ($50,000 at 1.35 is $67,500), divide by the number of remittances to get each payment, then solve for the periodic rate that would produce that same payment stream. Our calculator does that and annualises it. At six months it comes to about 126%.

 Is a factor rate the same as an interest rate?

No. Interest accrues on a balance over time, so paying faster costs less. A factor rate fixes the total on the day you sign, so time changes nothing about what you owe. That is why the two numbers cannot be compared as quoted, and why a 1.35 factor is not "35% interest".

 Does paying a merchant cash advance off early save money?

Usually not. The total was locked in by the factor rate, so clearing it in three months instead of six costs the same dollars, just sooner. Some providers will discount an early payoff, but it is never automatic. Ask whether any reduction is written into your agreement before you accept it.

 What happens to the payment if my sales drop?

It drops with them. Repayment is a share of your daily or weekly receipts rather than a fixed bill, so a slow week costs you less and the repayment period stretches instead. The total owed does not change. Our calculator asks for an expected payoff time because that share, not a due date, is what sets the pace.

 Is a merchant cash advance more expensive than a business loan?

Yes, and by some distance. An advance is the most expensive funding we offer. It is priced for speed and for approval when credit closes off other doors. If your business can wait a few days and qualifies for a term loan or a line of credit, the total cost will almost always be lower.

## See every option before you take an advance

One application covers all eight of our funding products. Checking takes a couple of minutes and uses a soft credit pull, and we will tell you if something cheaper is open to you.

 [See what you qualify for](https://www.fundbetter.com/apply/) [Talk to one of our advisors](https://www.fundbetter.com/contact/)