Revenue-Based Financing Effective APR Calculator

See the true price of revenue-based financing before you sign a cap multiple. Enter the advance size and the total multiple owed to reveal net proceeds after fees, average monthly repayments at your expected horizon, and the implied APR that lenders and investors will benchmark against traditional debt.

Gross capital advanced by the revenue-based financing provider.
Total payback divided by the original advance (e.g., 1.4 for 40% above principal).
Defaults to 12 months. Use your forecasted revenue ramp to refine the payback speed.
Defaults to 3.00%. The fee reduces net proceeds before funds hit your account.

Directional planning tool only. Confirm fee schedules, remittance mechanics, and prepayment clauses with your revenue-based financing provider.

Examples

  • $250,000 advance, 1.40× cap, 14-month payoff, 3% fee ⇒ Net cash after fees: $242,500.00 • Total repayment obligation: $350,000.00 (44.36% cost of capital) • Estimated average payment over 14.0 months: $25,000.00/month • Effective APR: 35.52%
  • $600,000 advance, 1.30× cap, 9-month payoff, 1% fee ⇒ Net cash after fees: $594,000.00 • Total repayment obligation: $780,000.00 (31.31% cost of capital) • Estimated average payment over 9.0 months: $86,666.67/month • Effective APR: 50.48%

FAQ

What if repayment takes longer than expected?

Increase the months input to mirror a slower ramp. A longer horizon lowers the APR but increases the total time capital is tied up. Track both metrics when comparing offers.

Can I model an early payoff discount?

Yes. Reduce the repayment cap multiple to the discounted amount and rerun the numbers. Many lenders offer a reduced multiple if you refinance into traditional debt.

How should I treat warrants or equity kickers?

Add their expected dollar value to the total repayment obligation or increase the cap multiple accordingly so the APR reflects the full economic cost.

Does the calculator assume a monthly holdback percentage?

The tool focuses on aggregate dollars. Pair the output with your revenue forecast to ensure the required percentage holdback will retire the balance within the horizon you entered.

Additional Information

  • Origination fees are deducted upfront in most revenue-based financing contracts, so the effective APR should be computed on net proceeds, not the gross advance.
  • Average monthly repayment assumes linear amortization for illustration; actual remittances float with revenue and often start lower before ramping up.
  • The APR calculation annualizes the repayment multiple over your expected payback horizon using simple compounding to approximate what a bank underwriter would quote.

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