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What that advance actually costs
A factor rate is not an interest rate, and it is designed not to look like one. Put your numbers in and see the APR, the weekly bite, and what a second position does to both.
Nobody hands you an APR on an advance. You get a factor rate — 1.35, 1.42, 1.49 — and a daily debit, and the two together are almost impossible to compare against a bank quote in your head. That is not an accident. This does the arithmetic the term sheet leaves out.
1. Factor rate → real annualized cost
The two numbers you need are on the term sheet: how much you receive, and the factor rate. If you know the payment, enter it and the term is derived; if you know the term, leave the payment blank.
2. What the debit does to your cash flow
The APR is the argument. This is the part you feel: money leaving the account before you have decided what it was for.
3. The stacking calculator
A second position does not add to the first — it compounds against the same deposits. Enter every advance you are carrying, including the one you are being offered.
How the APR here is worked out
Total repayment is the advance times the factor rate. The cost of the money is that total minus what you actually received — so any fee taken off the top counts as cost, because it is. The APR is the periodic rate at which the stream of level payments is worth the net cash you received, annualized: 252 payments a year for a business-day debit, 52 for weekly, 12 for monthly. That is the same math a lender uses to price a loan, applied to a product that is sold specifically to avoid being quoted that way.
Call it an estimate and treat it as one. Real advances have holdback percentages that move with your deposits, reconciliation clauses that may or may not get honored, and fees that show up after signing. But the estimate is close enough to answer the only question that matters at the table: is this two times the cost of the alternative, or ten?
One honest caveat in the other direction: an advance is not a loan, and the APR framing assumes a fixed term. If your sales genuinely collapse and the funder genuinely reconciles, the effective cost falls, because you repay the same total over a longer time. Whether that happens is a question about the funder's behavior, not about the paperwork. See the reconciliation clause, annotated.
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