Translate any offer
Factor rate or APR — one honest number.
Factor rate vs. APR: why the sticker number lies
A factor rate is a flat multiplier, not an interest rate. $100,000 at a 1.30 factor means you repay $130,000 — no matter how fast you pay it back. Because an advance is remitted daily or weekly while the balance never really drops, the true annualized cost is almost always far higher than that 1.30 makes it feel. That gap is exactly where business owners get hurt.
The only way to compare two offers fairly is to put them in the same unit: total cost, and an annualized cost. A loan at 22% APR and an advance at a 1.30 factor are not remotely the same thing — this tool shows you which is actually the cheaper money.
5 questions to ask before you sign anything
- What is the total dollar cost — the exact amount I pay back minus what I received?
- What is the annualized cost (APR-equivalent), not just the factor rate?
- Is repayment daily, weekly, or monthly — and what does that do to my cash flow?
- Are there origination fees or prepayment penalties hidden in the contract?
- If I pay early, do I save anything, or do I owe the full factor either way?
If whoever is funding you won't answer these in plain English, that tells you everything.
Never send your application and bank statements out blindly again
After 20 years in this business, I built ShopFunders on one promise: the cheapest capital I can find you, no arm-and-a-leg fees, and a real partner who reads the fine print with you instead of shopping your file to ten brokers. Bring me any offer you're holding — I'll translate it, and tell you honestly if I can beat it.
Get my honest, lowest-cost option