See the real cost of business financing — your monthly payment, total interest, and the true APR once fees are included (almost always higher than the headline rate). Priced with a factor rate instead? We convert it into a comparable APR so you can see what it actually costs.
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The interest rate is only part of the story with business finance. Most term loans, SBA loans and lines of credit charge an origination fee (often 1–5% of the amount) on top of interest. Because you pay that fee but still repay the full balance, your true APR is higher than the headline rate — this calculator works out the real figure so you can compare offers fairly.
Short-term financing and merchant cash advances are priced differently again, using a factor rate (like 1.35) rather than an interest rate. You simply repay the amount borrowed multiplied by the factor — so a $50,000 advance at 1.35 means repaying $67,500. That sounds modest, but because it's repaid quickly, the equivalent APR is often eye-wateringly high. Switch the financing type to "Merchant cash advance" to convert any factor rate into an APR you can actually compare.
The golden rule: always compare financing on APR and total cost, never the headline rate or factor alone.
Estimates only, and not financial or tax advice. Business interest and some fees may be tax-deductible — check with your accountant. Always confirm exact terms with your lender before borrowing.
Because of fees. An origination fee means you receive less than you borrow (or pay extra upfront), but you still repay based on the full loan amount. Spreading that cost across the loan pushes the real APR above the quoted interest rate — the gap is what the fee actually costs you.
A factor rate is how merchant cash advances and some short-term loans are priced. Instead of an interest rate, you multiply the amount borrowed by the factor (e.g. 1.35) to get the total you'll repay. It doesn't reduce as you pay down the balance, so the equivalent APR is usually far higher than it looks.
Usually yes. Because the fixed factor-rate cost is repaid over a short period, a factor of 1.3–1.5 can work out to an APR well into the double or triple digits. They're fast and easy to qualify for, but compare the equivalent APR against a term loan or line of credit before committing.
Interest on a business loan is generally tax-deductible, and some fees may be too — which lowers the effective cost. The rules vary by country and structure, so confirm what applies to you with an accountant.