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Cost Guide · 2026

Contractor Funding Factor Rates Explained

Understand what funding really costs — factor rates vs interest, and how to compare them.

Short answer: A factor rate (e.g. 1.3) is multiplied by the funded amount to set total payback — so $50,000 at 1.3 repays $65,000. Unlike interest, it doesn't drop as you pay down, so the effective cost can be higher. Revenue-based funding and lines of credit often lower that cost — all available through Funded Contractor Capital.

Factor rate vs interest

How the two pricing models work.

Factor RateInterest Rate
Example1.3 on $50K = $65K backAPR on the balance
Reduces as you pay?NoYes
Common onMCAs, advancesLoans, lines
Best whenFast, credit-flexibleLower total cost

Why contractors choose us

  • Compare revenue-based vs a straight MCA
  • Use a line of credit and pay only on draws
  • Avoid stacking multiple advances
  • Ask for total payback, not just the factor
  • FICO 500+ still qualifies for lower-cost options
  • Repay faster where terms allow

What you need to apply

  • US-based contracting business
  • 6+ months in business
  • ~$30,000+ in monthly revenue
  • Last 3 months of bank statements
  • Valid EIN and business bank account

Frequently asked questions

What is a factor rate?
A multiplier on the funded amount that sets total payback — $50,000 at 1.3 repays $65,000.
How do I get a lower-cost option?
Revenue-based funding or a line of credit often carry a lower effective cost than an MCA.
How fast can I get funded?
Most contractors fund within 24 hours of approval; smaller amounts can fund the same day. The application takes about 5 minutes with a soft credit pull.
Do I need good credit?
No — FICO 500+ can qualify because approval is weighted toward revenue and bank-deposit consistency.

Get the lowest-cost option

Apply in 5 minutes with a soft credit pull.

Apply Now →

Figures shown are typical 2026 industry ranges and vary by underwriting; actual terms are set at application. Funding is subject to approval. Product and company names referenced are the property of their respective owners.