Direct Answer: What is a factor rate?
A factor rate is a multiplier used to determine the total payback amount on a cash advance. For example, a funding amount of $10,000 with a 1.2 factor rate means you pay back $12,000 ($10k x 1.2). Unlike APR, it's a fixed cost, not interest over time.
Offers with '1.25 rates' sound like 25% interest, but the effective APR can be much higher depending on the term length. It's confusing.
The Solution: Cash Flow Funding
We believe in total transparency. We'll explain exactly what you pay back in dollars and cents, so you can make an informed ROI decision.
How We Help Factor Rate to APR Calculator & Guide
Fairly Funded connects you with partners who understand your industry. We look past the FICO score and focus on the health of your business.
Key Use Cases:
- Comparison: Compare a 1.3 factor (6 months) vs a 1.4 factor (12 months).
- ROI: If the capital helps you make $5k profit, paying $2k cost is worth it.
Frequently Asked Questions
Can I save money by paying early? Usually, factor rate deals are fixed cost. However, some partners offer 'early pay discounts' where they waive remaining fees. Ask us about this.
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