Free calculator
Factor Rate to APR Calculator
To convert a factor rate to APR, you need the term and payment frequency, because the same factor rate costs far more annually when repaid faster. As an estimate, a 1.25 factor rate repaid in daily payments over 6 months equals roughly a 90%+ APR, while over 12 months it's roughly 45%.
Last updated October 23, 2026
Estimated results
- Effective APR (est.)
- 92.2%
- Cost per $10,000
- $2,500
- Simple annualized rate
- 50.0%
Estimates for education only — not an offer. Actual terms are set by providers.
Get real offers with these numbersHow to use this calculator
- Enter the factor rate
- Enter the term in months
- Choose payment frequency
- Read the effective APR
Method
We treat each $1 advanced as repaid in equal installments totaling the factor rate, solve for the periodic rate that discounts those payments back to $1, and annualize it by multiplying by the number of payment periods per year.
Frequently asked questions
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Written by
BusinessFundingQuote Editorial Team
Small business finance writers
Reviewed by
Funding Review Desk
Reviewed for accuracy against current market practices
Rates and ranges on this page are typical market estimates for educational purposes, not offers. How we make money.