Choose total payback, estimated payment size, or factor rate. Enter the displayed inputs; factor rate is a repayment multiplier, not APR.

Apply the quoted factor to the advance.

Factor rate is a repayment multiplier, not APR. Estimates exclude fees outside the stated payback; fixed payments may differ from revenue-based collections.

Factor Rate Formula

The following two example problems outline the steps and information needed to calculate the Factor Rate.

FR = P / A
  • Where FR is the Factor Rate
  • P is the total payback amount ($) 
  • A is the advance amount ($) 

To calculate the factor rate, divide the payback amount by the advance amount.

How to Calculate Factor Rate?

The following example problems outline how to calculate Factor Rate.

Example Problem #1:

  1. First, determine the total payback amount ($).
    • The total payback amount ($) is given as 130,000.
  2. Next, determine the advance amount ($).
    • The advance amount ($) is provided as 100,000.
  3. Finally, calculate the Factor Rate using the equation above: 

FR = P / A

The values provided above are inserted into the equation below and computed.

FR = 130,000 / 100,000 = 1.30

Example Problem #2: 

For this problem, the variables required are provided below:

total payback amount ($) = 96,000

advance amount ($) = 80,000

Test your knowledge using the equation and check your answer with the calculator.

FR = P / A = ? (Answer: 96,000 / 80,000 = 1.20)