Turn a flat RBF fee into its true annual cost (APR and EAR), see how faster sales change it, and compare a bank loan.
Reviewed by CA Apurav GargUpdated Calculated in your browser; copied links include your figures
Also called the factor rate: 12% means you repay 1.12× the advance.
Processing fee, GST on it and anything else held back from the cash paid out.
Lenders usually sweep gross gateway collections, GST included, which repays them faster. Enter revenue above without GST.
A weekly gateway sweep repays sooner than a month-end sweep, so the same fee costs more a year.
Illustrative 15% — replace with yours. Shows how much of your monthly margin the sweep takes.
For example 40 for a festive month that is 40% higher. Leave blank to skip.
A working-capital loan of the same cash over the same months. Leave blank to skip.
55.47%
You receive ₹49,00,000 and repay ₹56,00,000 over 5 months. Counting how fast it is repaid, that is 71.99% a year compounded.
The sweep takes 93.33% of your monthly contribution margin
The monthly sweep of ₹11,20,000 is 93.33% of your monthly contribution margin (CM3) of ₹12,00,000. Little is left for fixed costs, so a slow month could leave a gap.
| Scenario | Monthly sweep | Months (exact) | Monthly IRR | APR | |
|---|---|---|---|---|---|
| Revenue as entered | ₹11,20,000.00 | 5 months (5) | 4.6228% | 55.47% | 71.99% |
| Revenue +40% | ₹15,68,000.00 | 4 months (3.57) | 6.0096% | 72.11% | 101.44% |
The same fee repaid faster costs more a year. The last month repays only what is left of the cap. APR = 12 × monthly IRR; EAR = (1 + monthly IRR)¹² − 1.
| Over the same months | RBF | Bank loan |
|---|---|---|
| Paid each month | ₹11,20,000.00 | ₹10,17,054.33 |
| Total cost | ₹7,00,000.00 | ₹1,85,271.66 |
| Extra cost of RBF | ₹5,14,728.34 | — |
Bank loan: EMI on a reducing balance at 15% a year, with no processing fee.
Revenue-based financing is quoted as a flat fee on the advance, repaid from a share of each month’s sales. The real cost depends on the cash you actually receive and how quickly the sales repay it.
Enter the offer and your sales to see the true annual cost as APR and EAR, how a strong sales month changes it, and what a bank loan of the same cash would cost.
2% deducted upfront; 14% of ₹80,00,000 monthly revenue swept.
The same advance and sales, with a contribution margin (CM3) of 15%: ₹12,00,000 a month.
Our Due Diligence & Valuation service covers funding options, working capital and cash planning.
The fee is charged once on the whole advance, but you repay it within a few months, and you never have the full advance for the whole period. Spread over a short time and a falling balance, a flat 12% becomes a much higher rate a year.
The repayment cap is fixed. When sales rise, a larger share is swept each month, so the cap is repaid sooner. The same fee over fewer months is a higher rate a year.
APR is the monthly rate multiplied by 12. EAR also counts the effect of compounding, so it is higher. Both come from the same monthly rate; lenders usually quote APR.
It is the rate at which the monthly repayments, each discounted back to the day you received the cash, add up to exactly the cash received. There is no direct formula, so the tool narrows it down step by step (bisection) until it is accurate to well under a paisa.
Anything taken out of the cash paid to you: a processing or documentation fee, GST on that fee if you cannot claim it as input tax credit, and any amount held back. The more is deducted, the less cash you actually receive for the same repayments.
No. It is a loan of the same cash over the same number of months at the rate you enter, with equal monthly instalments on a reducing balance and no fees. Actual loans have their own fees, security and eligibility.
We keep books, file GST and TDS returns and prepare monthly MIS for D2C and marketplace sellers. Share your figures and we will walk you through what we find.
A planning estimate for general information only, based on the figures you enter. It is not professional or investment advice, and not an offer or a comparison of any lender. Read the financing agreement for the actual terms.
