Use the written disclosure and agreement. This calculator is educational. It does not quote Sutton Funding terms, determine eligibility, create an offer or replace an APR or other disclosure required for a specific transaction.

Four cost metrics that answer different questions

Net proceeds

Net proceeds are the dollars the business actually receives or can use after any amount withheld at funding. This may differ from the stated financing amount when fees, prior balances or payments to third parties are deducted.

Total dollar cost

Total dollar cost is the financing amount the business pays above net proceeds under the stated schedule. The simplest comparison uses all required payments and fees shown in the offer.

Total-dollar formulaTotal financing cost = total scheduled repayment − net proceeds received

Factor rate or repayment multiple

A factor rate commonly expresses a multiplier rather than a time-based interest rate. If an agreement uses a factor of 1.25 against a stated amount, multiplying those figures produces a stated repayment amount before considering any additional fees. A factor does not, by itself, show how quickly payments occur or provide an annualized comparison.

Multiplier formulaRepayment multiple = total scheduled repayment ÷ net proceeds received

Annual percentage rate

APR is an annualized cost measure calculated from required cash flows and covered charges under an applicable method. Time matters: two offers with the same dollar cost can have very different annualized rates if one is repaid much sooner. Commercial-financing disclosure laws in states including New York and California require specified metrics for covered transactions, but rules, exemptions and calculation methods depend on the transaction and jurisdiction.

Transparent cost and repayment calculator

Enter figures from a written offer. The calculator runs entirely in your browser and does not transmit the values. It calculates simple cost measures and an effective annualized rate from an assumed series of equal, regular payments.

Use the amount available to the business after any withheld fees or known payoffs. Include all scheduled payments and required fees that are known from the offer. The annualized calculation assumes the first payment is one full period after funding and all payments are equal.

Calculator formulas and assumptions

Displayed arithmetic Cost percentage = (total repayment − net proceeds) ÷ net proceeds Average payment = total scheduled repayment ÷ number of payments Repayment multiple = total scheduled repayment ÷ net proceeds Annualized-rate method

The calculator solves for the periodic rate r where net proceeds equal the present value of all equal payments, then compounds that rate by the selected periods per year:

Net proceeds = payment × [1 − (1 + r)^−n] ÷ r Effective annualized rate = (1 + r)^(periods per year) − 1

The model assumes no payment at funding, equal payment amounts, equal spacing, no skipped dates and no additional cash flows. Do not use the annualized estimate for a sales-based structure with variable remittances, an irregular schedule or a transaction with charges not included in the inputs.

How to compare two offers

  1. Enter the net amount the business would actually receive, not only the headline amount.
  2. Add every required payment and fee to determine total scheduled repayment.
  3. Confirm the number and exact dates of payments.
  4. Record whether payments are fixed, variable or based on receipts or sales.
  5. Review whether early payment lowers cost and whether a prepayment charge applies.
  6. Compare collateral, guarantees, liens, default remedies and servicing terms.

Do not choose solely by the lowest average payment. A lower payment can result from a longer term and may produce a higher total cost. Likewise, a smaller dollar cost over a very short schedule may create more cash-flow pressure.

Sources and methodology

This guide explains general arithmetic and cites official disclosure and borrower-safety sources. A qualified accountant or attorney can review a business's specific cash flows and agreement.

  1. New York Department of Financial Services — Commercial Finance Disclosure Law regulation overview
  2. New York Department of Financial Services — 23 NYCRR Part 600
  3. California DFPI — Commercial financing disclosure metrics
  4. U.S. Small Business Administration — Compare offers and lending warning signs
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