APR vs Interest Rate

The interest rate is the percentage a lender charges to let you borrow the principal over time. APR, Annual Percentage Rate, wraps that interest rate together with fees (origination, underwriting, closing costs) and expresses everything as a single annualized cost.

For small business funding comparison, APR is the number that matters. Two loans with identical interest rates can have very different APRs once origination fees are included. Federal Reg Z requires APR disclosure on consumer credit; commercial small business funding has no equivalent mandate, which is why ICG Funding publishes APR ranges voluntarily.

Factor-rate products (BCA, revenue-based funding) do not naturally express as APR because repayment is not time-based. Use an APR converter to translate a factor rate + expected term into an equivalent APR.