Enter Revenue Advance Details
Formula Used
Total repayment: Advance Amount × Factor Rate
Factor fee: Total Repayment − Advance Amount
Origination fee: Advance Amount × Origination Fee %
Net proceeds: Advance Amount − Origination Fee − Fixed Fee
Monthly holdback: Projected Monthly Revenue × Holdback %
Total capital cost: Total Repayment + Total Fees − Advance Amount
Estimated APR: The calculator estimates monthly internal return from net cash received and repayment timing. It then annualizes that monthly rate.
How to Use This Calculator
- Enter the offered advance amount.
- Add the factor rate from the funding quote.
- Enter origination and fixed fees.
- Add your current monthly revenue.
- Enter the revenue holdback percentage.
- Add expected monthly revenue growth or decline.
- Use minimum payment only if the agreement requires it.
- Press calculate and review the repayment schedule.
This tool is for planning only. Always compare the output with the exact contract terms before accepting funding.
Example Data Table
| Scenario | Advance | Factor Rate | Monthly Revenue | Holdback | Estimated Use Case |
|---|---|---|---|---|---|
| Conservative | $25,000 | 1.18 | $30,000 | 8% | Short inventory purchase |
| Balanced | $50,000 | 1.25 | $40,000 | 12% | Marketing and payroll bridge |
| Aggressive | $100,000 | 1.38 | $75,000 | 18% | Expansion with higher repayment pressure |
Revenue Advance Loan Planning Guide
What This Calculator Measures
A revenue advance loan is often repaid from future sales. The lender usually sets a factor rate. This rate decides the total amount due. A holdback percentage then controls each repayment. The payment may rise when revenue grows. It may fall when revenue slows. This calculator helps you test those changes before signing.
Why Net Proceeds Matter
The offered advance is not always the cash you receive. Fees can reduce the deposit. Origination costs, fixed charges, and processing costs matter. A lower deposit increases the real cost of capital. That is why the calculator separates advance amount from net proceeds. It also compares total repayment with actual cash received.
Understanding Repayment Pressure
Holdback rate is very important. A high holdback can repay the advance faster. It can also weaken working capital. A low holdback may protect cash flow. It can extend the repayment period. The schedule shows this tradeoff month by month. You can change revenue growth to test slow or strong sales.
Using APR Carefully
Revenue advances do not work like simple installment loans. Payments may change each month. The estimated APR is only a planning signal. It helps compare offers with different fees and payback speeds. A short payoff can create a high annualized cost. This does not always mean the offer is bad. It means speed and cost must be reviewed together.
Better Funding Decisions
Use this tool before accepting any offer. Test several factor rates. Compare different holdback levels. Review the remaining balance after your selected term. Also check whether the business can handle slow months. A good advance should support growth. It should not drain daily operations. Keep a cash reserve. Read the agreement carefully. Ask how refunds, chargebacks, and low revenue months are handled. Clear terms reduce surprises and protect the business.
FAQs
What is a revenue advance loan?
A revenue advance gives business funding against future sales. Repayment is usually tied to a fixed percentage of revenue until the agreed payback amount is collected.
What is a factor rate?
A factor rate is a multiplier used to find total repayment. For example, a $50,000 advance at 1.25 requires $62,500 repayment before extra fees.
What is a holdback percentage?
Holdback percentage is the share of revenue used for repayment. If monthly revenue is $40,000 and holdback is 12%, repayment is $4,800 for that month.
Why are net proceeds important?
Net proceeds show the cash you actually receive after fees. This number helps measure the real funding cost more accurately than the headline advance amount.
Does this calculator show exact APR?
It estimates APR from cash received and projected repayments. Actual APR may differ because real revenue, timing, fees, and contract rules can change.
Can revenue growth change repayment time?
Yes. Higher revenue creates larger holdback payments and faster repayment. Lower revenue creates smaller payments and may extend the time needed to clear the balance.
What if the balance is not repaid?
If the balance remains after the selected term, test higher revenue, higher holdback, or longer terms. Also review contract requirements for minimum payments.
Should I accept the lowest factor rate?
Not always. Review fees, net proceeds, holdback pressure, payback time, and business cash flow. The best offer balances cost with operating flexibility.