MCA Decoder
What Does Your Factor Rate Really Cost?
Translate factor rates into APR to understand the true cost of MCAs.
Launch DecoderWhy This Matters
Understanding the real cost of financing can save your business thousands of dollars
Factor Rate vs APR
A 1.25 factor rate on $50,000 means you pay back $62,500. But what's the real APR?
Visual Clarity
Watch interest and principal visualized in real-time as you adjust terms
Interest
Principal
67%APR
Real-World Impact
A contractor borrowing $100,000 at a 1.3 factor rate over 12 months pays $30,000 in fees — equivalent to a 60% APR.
SBA Alternative: Same loan at 10% APR saves $20,000
The Cost Gap
SBA 7(a) Loan8-13% APR
Bank Term Loan12-18% APR
Factor Rate 1.2540-80% APR
Factor Rate 1.4080-120% APR
Common Scenarios
- •Construction: Equipment financing with hidden daily payments
- •Retail: Inventory loans with factor rates instead of APR
- •Services: Working capital advances with unclear true costs
Important Disclosure
This tool provides educational estimates only and does not constitute financial advice. Actual APR may vary based on your specific terms, fees, and repayment schedule. Always review loan documents carefully before signing.