Calculator

Factor Rate to APR Converter Compare on a level field.

Convert a factor rate into an approximate equivalent APR so you can compare revenue-based and BCA offers against term loans on a level field.

Last updated 2026-04-16Reviewed by ICG Funding

Advance amount

The cash you receive at fundingFactor rate

Typical range: 1.15 to 1.45Estimated repayment term (months)

Most revenue-based products repay in 3–18 months.

Estimate

Equivalent APR72%

Total repayment$65,000

Total cost of capital$15,000

The formula

totalCost  = (factor − 1) × advance
avgBalance = advance ÷ 2
APR        ≈ (totalCost ÷ avgBalance) × (12 ÷ months)

This is the industry-standard quick-conversion. It approximates the true internal rate of return within 2–3 percentage points over the 3–18 month range typical for revenue-based products.

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The formula

totalCost = (factor − 1) × advance avgBalance = advance ÷ 2 APR ≈ (totalCost ÷ avgBalance) × (12 ÷ months)

This is the industry-standard quick-conversion. It approximates the true internal rate of return within 2–3 percentage points over the 3–18 month range typical for revenue-based products.