Cost of capital
Factor rate calculator
Turn a merchant cash advance or short-term quote into payback, daily payment and an estimated APR — with a fixed daily payment or a share of your card sales.
How this is calculated
Payback = advance × factor · Daily payment = payback ÷ business days
Paid from card sales: business days = payback ÷ (monthly card sales × holdback ÷ 21). Estimated APR = the yearly rate at which the daily payments are worth exactly the money you receive after fees, using 252 business days a year.
Worked example
A $50,000 advance at a 1.35 factor repays $67,500. Over 126 business days (about 6 months) that is $535.71 a day. With a 2% fee you receive $49,000, which makes the estimated APR about 134.9%. Repaid instead from $60,000 a month of card sales at a 10% holdback, the payment is about $285.71 a day over roughly 236 business days, and the estimated APR falls to about 72.2%.
Assumptions
- Fixed mode: the same payment every business day. Card-sales mode: sales spread evenly over 21 business days a month, so the real term — and the APR — moves with your sales.
- 252 business days a year.
- Fees are taken from the advance up front.
Questions owners ask
What is a factor rate?
A multiplier that sets the total you repay. A 1.35 factor on $50,000 means you repay $67,500, however quickly you pay it back.
Why convert a factor rate to an APR?
A factor rate ignores time. Paying $17,500 extra over 6 months costs far more per year than over 2 years. The APR puts both on the same yearly scale as a loan.
What is a holdback?
The share of each day’s card sales the provider keeps until the advance is repaid. A higher holdback repays faster, which raises the cost per year even though the total payback stays the same.
Is the estimated APR exact?
No. It assumes the daily payment, or your sales, stay steady. If sales slow down, repayment takes longer and the cost per year falls; if sales grow, it rises.
Read before you borrow
Guides behind the numbers.
01Business loan rates and costs: what you actually pay
Understand business loan rates, APR, factor rates, fees, payment frequency and total repayment so you can compare financing offers accurately.
Read the guide ↗
02Business loans for bad credit: options, costs and risks
Explore business loans for bad credit, what lenders evaluate beyond scores, realistic financing routes, costs, red flags and an approval-improvement plan.
Read the guide ↗
03How to choose the right financing for the job
Learn how to choose business financing by matching the use of funds, repayment structure, timing and risk to your company’s cash-flow cycle.
Read the guide ↗Calculators give estimates for educational purposes only. They are not an offer, approval or commitment to lend. Actual rates, fees, terms and payments are set by independent providers and depend on their review. ScaleKit Financing is operated by Arch Ventures LLC and is not a lender.