Free tool
Factor rate to APR converter
What that 1.3 factor really costs.
Your result is an estimate based on the answers you enter. It is not filed or stored anywhere.
Method
How this calculator works
Online lenders and merchant cash advances quote a factor rate — a flat multiplier like 1.3 — instead of an interest rate, which hides how expensive the money is. Multiply the advance by the factor to get total repayment; the difference is your financing cost. Over a short term, a modest-looking factor can translate to an APR far above any credit card.
This tool estimates the annual percentage rate from the factor rate and term using a standard constant-ratio approximation with even monthly repayment. Because most advances are actually repaid daily or weekly — pulling your cash back faster than monthly — the real APR usually runs higher still. Use the estimate to compare offers, not as a contractual figure.
Estimates, not advice
Every figure this tool produces is a planning estimate built from the numbers you enter and simplified assumptions documented above. It is educational content, not individualized financial, legal, or tax advice. Rates, limits, and thresholds change — annual constants are reviewed each January, and you should confirm anything decision-critical against primary sources or a professional.
Questions
FAQ
Why is the APR so much higher than the factor suggests?
A factor rate ignores time. Paying 30% more (a factor of 1.3) over six months is a far higher annual rate than paying it over 24 months, because APR measures cost per year. The shorter the term, the more punishing the APR.
Is the APR figure exact?
No — it is a planning estimate that assumes even monthly payments. Daily or weekly remittance, common with cash advances, repays principal faster and pushes the true APR above what this shows.
How do I compare this against a loan?
Convert both to APR and compare like for like. An advance that looks cheap as "just 1.3" often carries an APR several times that of a term loan or line of credit — this converter makes that visible.