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Get Your Real Rates - Apply FreeOur business loan calculator provides two calculation modes to help you estimate costs for different types of business funding:
Use the factor rate calculator when estimating costs for merchant cash advances, revenue-based financing, and short-term business loans from alternative lenders. These products use factor rates rather than traditional interest rates.
A factor rate is a decimal multiplier that represents the total cost of borrowing. For example, a factor rate of 1.25 means you'll repay 125% of what you borrowed. On a $50,000 advance, that's $62,500 total — a cost of $12,500 for the funding.
To use the factor rate calculator:
Use the interest rate calculator when estimating costs for traditional bank loans, SBA loans, or term loans that use annual percentage rates (APR). Unlike factor rates, interest rate loans accrue interest over time, so early payoff reduces total cost.
The interest rate calculator uses standard amortization formulas to compute your monthly payment, total interest paid, and total repayment amount over the life of the loan.
Each result from the calculator provides several key metrics:
This is the complete amount you'll pay back to the lender over the life of the loan. It includes both the original principal (the amount you borrowed) and the total cost of capital (factor rate markup or accumulated interest). This is the number that matters most for budgeting purposes.
This is the difference between what you borrow and what you repay. It represents the actual "price" of the funding. On a $50,000 advance with a 1.30 factor rate, the cost of capital is $15,000 ($65,000 total repayment minus $50,000 borrowed). This is the number to evaluate against the expected return on your funded activities.
Your individual payment amount based on the frequency you selected (daily, weekly, or monthly). For daily payments, we calculate based on 21 business days per month. For weekly payments, we use 4.33 weeks per month. This tells you exactly how much will be withdrawn from your account each period.
For factor rate calculations, we convert to an approximate annual percentage rate (APR) for comparison purposes. This helps you compare the cost of a factor rate product against traditional interest rate products. Note that APR equivalents for short-term funding products can appear very high because they annualize costs that occur over shorter periods.
Understanding the difference between these two pricing structures is essential for making informed borrowing decisions:
| Feature | Factor Rate | Interest Rate (APR) |
|---|---|---|
| How it works | Multiplied by loan amount for fixed total cost | Applied annually to outstanding balance |
| Total cost | Fixed regardless of payoff timing | Decreases with early payoff |
| Common range | 1.10 - 1.50 | 6% - 50% APR |
| Used by | Alternative lenders, MCA providers | Banks, SBA lenders, credit unions |
| Transparency | Simple multiplication | Requires amortization calculation |
| Early payoff benefit | Usually none (fixed cost) | Saves on remaining interest |
| Best for | Short-term funding (3-18 months) | Long-term loans (1-10 years) |
To illustrate the practical difference, consider a $100,000 funding scenario:
This comparison reveals an important insight: factor rate products have fixed total costs regardless of term length. The term only affects the payment size and speed of repayment. Interest rate products, by contrast, accumulate less total cost over shorter terms.
The calculator helps you estimate payments, but affordability analysis requires comparing those payments to your business cash flow. Here's a framework for determining how much you can comfortably borrow:
Your total daily debt service (all loan and advance payments combined) should not exceed 15-20% of your average daily revenue. This ensures your business retains enough cash flow to cover operating expenses, handle unexpected costs, and maintain healthy bank balances.
A business generating $2,000 per day in revenue ($42,000/month) using the 15-20% rule:
Use the calculator above to run these scenarios with your actual numbers before applying.
While you can't always control the factor rate offered, several strategies can reduce your total cost of capital:
Here's a quick reference for common funding amounts and their approximate costs at different factor rates:
| Amount | 1.15 Factor | 1.25 Factor | 1.35 Factor | 1.45 Factor |
|---|---|---|---|---|
| $10,000 | $11,500 ($1,500 cost) | $12,500 ($2,500 cost) | $13,500 ($3,500 cost) | $14,500 ($4,500 cost) |
| $25,000 | $28,750 ($3,750 cost) | $31,250 ($6,250 cost) | $33,750 ($8,750 cost) | $36,250 ($11,250 cost) |
| $50,000 | $57,500 ($7,500 cost) | $62,500 ($12,500 cost) | $67,500 ($17,500 cost) | $72,500 ($22,500 cost) |
| $100,000 | $115,000 ($15,000 cost) | $125,000 ($25,000 cost) | $135,000 ($35,000 cost) | $145,000 ($45,000 cost) |
| $250,000 | $287,500 ($37,500 cost) | $312,500 ($62,500 cost) | $337,500 ($87,500 cost) | $362,500 ($112,500 cost) |
Calculator estimates are helpful, but your actual rates depend on your unique business profile. Apply free to see real offers from real lenders.
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Use the calculator for free. Apply for free. Review real offers with zero obligation. If the numbers don't work for your business, walk away at no cost. We believe in transparency — which is why we built this calculator for you to use before you even contact us.