We are not accepting new customer applications. If you need fast business funding, check out our partner brand OnDeck, America’s largest online small business lender. If you’re an existing customer and have a question about your account, please email service@businessbacker.com.

Factor Rates vs. APR

Learn more about how business financing costs are represented.

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The Business Backer is not accepting new applications.

Understanding APRs and Factor Rates

Like any type of business financing, the money you borrow comes with a cost to finance. Many people are familiar with the term annual percentage rate (APR), a figure commonly associated with credit cards and other consumer funding options. But certain types of business funding (such as a merchant cash advance or purchase of receivables), represent the cost of funding in the form of a factor rate.

What Are Factor Rates?

Factor rates are expressed as a decimal figure rather than a percentage and typically range from 1.1 to 1.5. In order to determine the total amount you'll need to pay back in the end, you can multiply your factor rate by the total amount that you were funded. This is different from an APR, which is always annualized. So, if you have a factor rate of 1.3 on a funded amount of $12,000, you would owe back a total amount of $15,600 on a 12-month term.

What Goes Into Determining a Factor Rate?

Factor rates are specific to business funding, and are typically based on the following:


Time in Business

Term Length

Credit Score (Business and Personal)

What Is APR?

It's important to distinguish APR from interest rates. Interest rates only describe the percentage of interest you will be charged for borrowing and does not include any other fees you may be required to pay (such as origination fees and other finance charges). APR, on the other hand, gives a more complete picture of how much you'll pay for the loan. It’s the total cost of borrowing expressed in terms of a percentage — it includes the interest rate plus additional fees.

Business Funding Available Through The Business Backer

Learn more about how each of the funding options available through The Business Backer works.

Fixed amount up to $200,000

Revolving credit line up to $100,000 offered through our partner Headway Capital

Purchase of future receivables agreement up to $200,000

From Application to Funding in 3 Easy Steps

  1. Apply online.

    One of our experienced Funding Advisors will call you shortly.

  2. Receive a decision.

    Your Funding Advisor will help determine the best financing option after you submit 3 months of business bank statements.

  3. Receive your funds.

    Sign your contract and receive funds as soon as next business day, if approved.

Apply for Funding

The Business Backer is not accepting new applications.

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