$50,000 at 1.35
A hypothetical example
The fee is 35%, $17,500, once, whatever the term. The two tiles beside it use this example.
A factor rate is a fee, not a rate. Type the offer as it is written, the amount you receive, the factor rate, how often you repay, and how long it runs. Both annual figures come back, named. Nothing is stored and there is no sign-up.
On a fixed fee the dollars are fixed. A good month sweeps more, the balance clears sooner, and the same fee lands on fewer days of use, so the annual figure goes up. If the offer says there is no prepayment penalty, ask whether prepaying reduces the total or only ends it sooner. Those are different answers, and this page shows you the difference.
Read the worked example →ONE APOLLO runs marketplace brands of its own. We have had the financing tile light up in a seller dashboard and the factor on it look small. This page is the arithmetic we wanted before clicking.
ONE APOLLO Capital is the funding side of the same company. We are a broker, paid by the funder on deals that fund, never by you.
No. A factor is the total you repay divided by the amount you received. 1.35 on $50,000 means $67,500 back. The $17,500 is a fee, fixed at signing, and it does not shrink if you repay faster. An interest rate charges you on the balance you still hold, so paying down the balance lowers what you pay. Two offers with the same factor can cost very different amounts per year, which is the whole reason this page exists.
Use the effective APR when you are comparing the offer with a loan or a line of credit, because that is how their rates are counted. Use the simple figure when you are checking a number someone else printed, because it is usually the one they printed. Always say which one you used. Comparing a simple figure with a bank's APR flatters the advance.
Because you do not hold the money for the whole term. Paying daily, you start giving it back the first week, and by the middle of the term you have returned half of it, yet the fee is still charged on the full amount. The simple method ignores that. The effective method counts the balance falling with every payment, which is how a loan's APR is counted, and the shorter the term, the wider the gap between the two.
If the cost is written as a fixed fee or a factor, yes, whatever the product is called. Shopify's own example is a $100,000 loan with a 13% fee; type 1.13 and the payback period you expect, and both figures appear. Several of the products behind Amazon's Seller Central tile are fixed fees too, and our guide to that tile sorts them. A product priced as interest on a drawn balance, like a line of credit, is not a factor and does not belong on this page.
Enter them. An origination fee deducted from the proceeds means you received less than the amount on the offer while repaying the same total, so the real cost is higher than the factor alone says. The page subtracts the fee from what you received before it runs either method.
Neither. It is arithmetic on an offer you already have from someone else, run in your browser. We do not quote rates on this page or anywhere else before a funder has priced your file. If you want a second document to put beside the one you were given, the application is one form and a soft credit check, and you come out prequalified for review with the structure named plainly.
One application. A soft credit check. Every funder you fit prices the same file, and you compare by email.
See what you qualify for →