What factor rate will apply to my advance, and how is it determined?

MCAs use a factor rateinstead of an interest rate.

Example:

• Advance: $50,000
• Factor: 30
• Total payback = $50,000 × 1.30 = $65,000

The factor rate is based on:

• Time in business
• Average monthly deposits and sales volatility
• Industry and margins
• Chargeback and NSF history
• Existing debt and obligations
• Quality and completeness of documents

Higher risk or urgency usually means a higher factor; stronger stability and financials usually mean a lower factor.