What is the difference between a factor rate and an APR?
A factor rate is a multiplier showing total repayment (e.g. 1.25 = repay 125% of the advance). APR annualizes the cost of borrowing. The same factor rate can imply very different APRs depending on the repayment term.
Start an applicationFactor rate × principal = total repayment. It tells you the dollar cost but not the time cost.
APR normalizes cost across products by annualizing it. A 1.20 factor repaid over 6 months has a much higher APR than the same factor repaid over 18 months.
When comparing offers, always convert to APR or to monthly cost of capital. Voxen does this calculation on every file so business owners compare apples to apples.
How cost is quoted, by product
Figures are typical ranges for a complete file, not guarantees. Final terms depend on revenue, time in business, credit profile and lender review.
| Merchant Cash Advance (MCA) | Factor 1.15–1.45 |
|---|---|
| Business Line of Credit | ~8–20% APR |
| Invoice Factoring | 1.5–4% of invoice |
| Equipment Financing | ~7–18% APR |
| Bridge Loan | ~10–18% APR |
| Term Loan | ~8–22% APR |
| Inventory Financing | Quoted per file |
| Purchase Order Financing | Quoted per order |
| Acquisition Financing | Stack-dependent |