Tool
A factor rate is not an interest rate. This is the difference.
A 1.35 factor looks like 35%. On a 6 month daily remittance it is not 35%, and it is not close, because you start paying the money back the morning after it lands and you never hold most of it. Enter the offer in front of you and see what it actually costs, what a term loan would have to charge to cost the same, and what the number is per dollar you keep.
Runs entirely in your browser. Nothing is stored, sent to Citadel Ridge, or added to an intake.
Step 1
The offer.
Take it from the contract or the term sheet, not from what you were told on the phone. You need 3 numbers: what lands in the account, what comes back in total, and what leaves each day or week. Give either the factor rate or the total payback and the other fills itself in.
If the contract sets a percentage of daily deposits rather than a fixed debit, enter the dollar figure your bank statement actually shows on an average day.
Step 2
What it costs.
Simple annualized cost spreads the contract cost evenly over the term. APR equivalent is the rate that makes the remittance stream equal the cash you actually received, which is the method the state commercial financing disclosure laws use, and it is the higher number because the balance is falling from the first debit.
Step 3
The same money, priced as a loan.
What a term loan would have to charge, over the same period and over a realistic 24 and 36 month schedule, to cost you what this advance costs. The longer schedules are there because that is the comparison that matters: not what the advance costs against a loan of the same length, but what it costs against the structure the business should be carrying.
| Structure | Cash received | Term | Payment | Total repaid | Total cost | Cost per dollar kept |
|---|
A planning tool, not a disclosure. The figures are computed only from what you enter, using 252 business days and 52 weeks a year, and they are Citadel Ridge's own model rather than the statutory disclosure a provider must give you in the states that require 1. The term loan lines are arithmetic on an assumed rate, not an offer, a quote, or evidence that any lender will approve you. The calculator does not evaluate eligibility or creditworthiness. Nothing entered here is stored by the site, sent to Citadel Ridge, or added to an intake. Closing the page clears it.
Why the gap is so wide
You are paying for money you no longer have.
The mechanism, in 1 paragraph.
A term loan charges interest on what is left. An advance charges a fixed dollar amount set on day 1, and takes it back on a schedule that starts immediately. By the midpoint of a 6 month daily remittance you are holding roughly half the money and still owing the whole fixed cost, so the cost per dollar you actually have the use of is far above the factor. Shorten the term and the effect gets worse, not better: the same 1.35 factor collected over 4 months costs more per year than the same 1.35 collected over 12, which is why a funder offering to "get you out faster" is quoting you a higher number, not a lower one.
None of that makes an advance the wrong answer. It makes it an expensive answer that has to earn its place: speed that produces a return you can point at, a gap that closes on a date you can name, or a job that pays for itself. What it cannot survive is being carried as ordinary working capital for a year, renewed each time it is half paid.
Questions
What people ask about factor rates.
What is a factor rate?
A multiplier applied once to the amount advanced to set the total amount that must come back. An advance of $100,000 at a factor of 1.35 has a payback of $135,000. The factor is not an interest rate, does not compound, and does not fall if you pay sooner unless the contract contains a discount for early payoff, which most do not.
Why is the APR equivalent so much higher than the factor?
Because the factor measures cost against the full amount for the full term, and an APR measures cost against the balance you actually have the use of. Remittances start within days of funding, so the average balance outstanding across the term is roughly half the amount advanced. Same dollars of cost, half the money, so roughly double the rate, then more again because the term is short.
Does paying it off early save money?
Usually very little, and sometimes nothing. The obligation is a fixed dollar payback, not accruing interest, so unless the contract grants a stated early payoff discount, retiring it early pays the same total across fewer days, which raises the effective annualized cost rather than lowering the amount. Read the prepayment paragraph before assuming otherwise.
Is a factor rate legal to quote instead of an APR?
Commercial financing is not consumer credit, so the federal truth in lending rules do not apply. A growing number of states now require the provider to hand you a standard disclosure with an annualized rate at the time of a specific offer, and where a broker is involved the broker must pass that disclosure through unaltered. Which states, and what Citadel Ridge does on every file, is set out on the state disclosures page.
What is a normal factor rate?
First position paper commonly prices between 1.15 and 1.49, with the term and the remittance frequency doing as much to the true cost as the factor itself. Second and third positions price higher because they sit behind the first in the same deposit account. A factor quoted without a term and a remittance is not a price; it is half a price.
Does this tool send my numbers anywhere?
No. Everything runs in the page on your own device. Nothing is stored, transmitted to Citadel Ridge, or attached to any intake, and closing the page clears it. If you want a read on the actual file, send it through the intake form instead.
Start with the file
A straight read within 2 business days.
Send the basics through the intake form: what the file supports, what is missing, and the next step if there is one. If we are not the right desk for it, we say so.