APR to Flat-Fee Lending Translator

Demystify merchant cash advance and flat-fee offers by turning their factor rate into a true annual percentage rate and daily payment amount. Enter the funded advance, contracted payback, and term. Layer in business-day remittances, withheld fees, and extra costs to see the equivalent APR, cost per $1,000, and net cash you actually receive.

Gross funding you are promised before holdbacks or fees.
Total contracted repayment including the flat fee or factor multiple.
Length of the remittance cycle until the balance is cleared.
Defaults to 21 to approximate business-day remittances (set 4.33 for weekly, 2 for biweekly).
Defaults to $0. Represents origination fees or holdbacks kept at funding.
Defaults to $0. Add broker, ACH, or renewal fees paid outside the contract.

APR calculations assume equal remittances across the term. Verify with the provider if payments step up or down over time.

Examples

  • Advance $75,000, payback $96,000, 12-month horizon, 21 remittances/month, $2,250 withheld, no extras ⇒ Factor rate is 1.28 and equivalent APR is 78.66%. Net funding of $72,750.00 repays $96,000.00 over 252 payments of $380.95. Total financing cost is $23,250.00 ($319.59 per $1,000 advanced).
  • Advance $40,000, payback $52,500, 9-month horizon, default payment frequency, $1,200 withheld, $500 extras ⇒ Factor rate is 1.33 and equivalent APR is 139.81%. Net funding of $38,800.00 repays $53,000.00 over 189 payments of $280.42. Total financing cost is $14,200.00 ($365.98 per $1,000 advanced).

FAQ

Why is APR higher than the factor rate suggests?

Flat-fee products accelerate repayment with daily remittances and often withhold fees upfront, so the effective annualized rate compounds faster than the headline factor multiple suggests.

How should I handle irregular payment schedules?

Use the payments-per-month field to approximate average remittances. For weekly or custom cadences, divide total expected payments by the number of months to convert into an equivalent monthly frequency.

Can I compare offers with different terms?

Yes. Running each offer through the translator produces comparable APRs, per-payment obligations, and cost-per-$1,000 metrics so you can select the most affordable structure.

Additional Information

  • Equivalent APR is solved via an internal rate of return on the full remittance schedule and annualized using the payment cadence.
  • Factor rate is simply total payback divided by the gross advance; adding withheld fees shows your true net cost of capital.
  • Cost per $1,000 advanced lets you benchmark flat-fee offers against term loans, lines of credit, or SBA financing.

Related calculators