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What it means
A factor rate is a flat multiplier on the advance, common on merchant cash advances and short bridges. Borrow £10,000 at 1.2 and you repay £12,000, whether that takes three months or a year.
Why it matters for your company
Repaying faster does not reduce a factor rate, so a modest-looking factor on a short repayment can be an eye-watering APR. Convert it to total repayable before comparing. Read APR vs factor rate.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Is a factor rate the same as interest?
No. Interest accrues over time on the balance; a factor rate is a fixed multiplier that ignores time. The same factor costs more, in APR terms, the faster you repay.
How do I compare a factor rate?
Convert it to total repayable in pounds, then to an APR if you can. Never compare a factor rate directly against an interest rate as quoted.
Related reading
What does APR mean for a business loan?
APR is the annual percentage rate — the yearly cost of borrowing including compulsory fees, expressed as one…
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What is a merchant cash advance?
A merchant cash advance (MCA) is a form of business finance where a provider gives your company a lump sum up…
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APR or factor rate — what's the difference?
APR expresses the annualised cost of credit including fees, while a factor rate is a flat multiplier applied…
Read →What does 'base rate plus a margin' mean on my loan?
It means your rate is the Bank of England base rate plus a fixed margin the lender set from your risk — the…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.