A tool designed to estimate the costs and repayment terms associated with a specific type of funding secured by a business’s future sales revenue. This instrument allows potential borrowers to input variables such as the desired funding amount, factor rate, and estimated monthly sales to project repayment schedules and understand the total payback amount. For instance, a business anticipating $10,000 in monthly credit card sales might use this to assess the feasibility of accepting a $50,000 advance with a factor rate of 1.3.
This resource offers businesses a means of evaluating the financial implications before committing to an agreement. It facilitates informed decision-making by highlighting the total cost of capital, which is useful for budgeting and comparing it against other financing alternatives. The functionality is particularly valuable in situations where businesses require immediate capital for expenses such as inventory procurement, marketing campaigns, or equipment upgrades, providing insights into the short-term financial obligations associated with this form of funding.
