Glossary
Factor rate
Also called: MCA factor, buy rate
One-sentence definition
A factor rate is the multiplier applied to a merchant cash advance amount to determine total repayment, expressed as a decimal — for example, a 1.30 factor on a $50,000 advance means $65,000 total repayment.
Key takeaways
- The MCA equivalent of an interest rate, expressed as a multiplier.
- Set by the funder based on file risk, industry, and duration.
- Adjusted-revenue analysis can support more accurate risk-based pricing.
Why it matters for MCA underwriting
Funders that underwrite on inflated revenue figures often price too low for the actual risk. Better revenue intelligence means better-priced deals and lower default rates.
How Vyaso detects factor rate
Not a Vyaso detection target — this is a glossary entry for context. Vyaso supports the underwriting decision that informs factor-rate pricing.