Factor Rate vs Interest Rate

Unsecured, not collateralized business funding and financing has a different look than traditional financing you would see from a bank, like a mortgage. 

With more traditional types of lending from banks, you can qualify for an SBA, term loan or maybe a line of credit. These type of fundings, you need a very good personal credit score, plus have consistent revenue that shows you can afford. These types of funding take anyway from a minimum of 4 weeks to 16 weeks.

As a consumer, you are used to seeing interest rates. What's the interest rate? Is
always a question I get asked from some that has never taken out short term financing. Mortgage rates 6.5% interest sounds great. Issue is the length of the term. When you see it all laid, how much you paid for your house, if it took you all 30 years, you are paying more than double what the sale price. 

I point that out because lenders basically will lend out at almost the same rates.  Short term financing can go from a factor rate from 1.1 to 1.6. This means the cost of money borry is multiplied by this number for the payback amount. You will see a weekly or daily payment. All of these are determined by your file.

So now we got the rate, let's talk length of term. I'm working a small funding where I'm doing $15k with a payback of $21 and change. I could get her more money, like $25k $30k but the term would be shorter and would raise her payments. It was like 155 days and $940, around there as weekly payment. I could of got her $30k but talking over her needs, we saw term length was important. We syndicate on many different platforms, have many partners where we have flexibility. I got her the weekly payment and term she wanted. 

So the cost of the money is high for these type of loans, you have to really understand why the cost is where it is. 

Unsecured Business Funding Amounts are based on your monthly revenue and the term and rates will be based on your file and risk. 

The term for unsecured financing is less expensive than a collateralize mortgage loan. Difference is if they don't pay, they take the house. You don't pay, they have to hire lawyers and such. 

If you have great revenue and great business credit history, no defaults, no over drawn or tons of negative days, you can get a longer term. I've seen 9 month to 18 months. 

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Understanding Unsecured Business Funding vs. Traditional Financing

Unsecured business funding—also known as non-collateralized financing—works quite differently from the traditional loans you might get from a bank, such as a mortgage.

With more conventional lending options like SBA loans, term loans, or business lines of credit, banks require strong personal credit, consistent revenue, and extensive documentation. These types of funding can take anywhere from 4 to 16 weeks to close, depending on the lender and your qualifications.

A common question we hear is: “What’s the interest rate?” That’s understandable—most consumers are familiar with mortgage or auto loan rates. A 6.5% mortgage rate may sound great, but over a 30-year term, you often end up paying more than double the home’s purchase price. That long-term cost is important to keep in mind.

In the world of short-term, unsecured business funding, we talk about factor rates instead of interest rates. A factor rate typically ranges from 1.10 to 1.60, which means if you borrow $10,000 at a 1.3 factor rate, you’ll repay $13,000. Repayment is usually made via daily or weekly automatic payments, and the exact terms depend on your business’s financial profile.

Let’s look at a recent example: I helped a client secure $15,000 in funding with a payback amount of just over $21,000. The term was around 155 days with weekly payments of approximately $940. I could have gotten her $25,000 or even $30,000, but shorter terms would have raised her weekly payments significantly. After discussing her business needs, we prioritized a more manageable payment structure over a larger funding amount.

That’s one of the advantages of working with us—we syndicate across multiple platforms and work with a wide network of funding partners. That gives us the flexibility to tailor offers to your situation.

Now, it's true—short-term funding can be more expensive than traditional loans. But remember, there's no collateral involved. With a mortgage, if you default, the lender takes your home. With unsecured business funding, the lender has to go through a legal process to recover losses, which increases their risk—and that’s reflected in the cost of capital.

The funding amount you're eligible for is based primarily on your monthly revenue, and the terms and rates depend on your credit, business history, and overall risk profile. If your business has strong cash flow, solid credit, and no defaults or major issues like frequent overdrafts, you may qualify for longer terms—sometimes up to 9 to 18 months.

We keep things simple. No long underwriting process. We’re upfront about what we can do. As a family-owned private equity firm based in Boca Raton, Florida, we take pride in working closely with our clients to get them the funding they need—on terms that make sense.

If you’re curious about what you might qualify for, just fill out the form below. Let’s find the best solution for your business together.

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Looking for an Unsecured Small Business Loan? I'll Explain How it Works.

If you're looking for an unsecured small business loan, the process can be fast and straightforward. Lenders understand the challenges of borrowing in today's economy and are ready to assist.

Running a business often requires additional funds—whether for inventory, equipment, or expansion. Fortunately, there are lenders offering business loans without collateral. If your business has been operating for over a year and meets certain revenue criteria, you may pre-qualify. Every credit situation is unique, and lenders work to secure funding at no cost to you until you're approved.

Loan amounts vary based on credit history and business revenue, with no assets required. You need at least $20k revenue.  Applications are processed quickly, often within a couple days, and just bank statements are typically needed. These loans are available for various business types, with flexible repayment terms but it depends on how your business bank account looks. For example, if you have have $20k in deposits per month with no negative items, we typical will lend you $20k, depending on industry. You have $200k, you can probably get $200k! Fast Funds Group does it at an affordable rate.

Applying is free, though some lenders may deduct a processing fee or consulting charge from the loan amount. Fast Funds Group isn't a broker and doesn't charge a fee. We are a private equity firm that could save you fortune.  Repayment depends, again on your business account. Best to be proactive about funding and do not wait till your account suffers.  We have different options.   

*If you have multiple advances, fill out the form below to get information about our exit strategies from multiple MCAs if it is killing your cash flow. 

Fast Funds Group isn't a broker. We do not sell your information. We get a funding file together and pass it to our senior analyst who reviews your file and can determine what we can do for you in 5 min instead dragging you through a long underwriting process, promising you the stars to then deliver a crappy deal to you. Homie don't play that!  Fill this out.

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