Quote Originally Posted by bdshaw View Post
Jotucker I respectfully disagree. Your stating your definition of cost but we all know there is an implied interest rate. We've used the same logic in factoring for years but when asked about cost I think we're being asked about interest rate. I'm the leasing business we defined a lease factor as a way to avoid stating the effective interest rate.
Well, I agree in that when we are asked the "true cost" of the MCA, they are "trying to get us" to calculate an APR. The issue is that there's no APR or interest rate associated with the transaction, so I shouldn't be calculating it even if it's requested. I should instead be educating the merchant on the difference of an MCA v.s. that of a Loan.

Interest rates (along with their associated APRs) are associations of loan transactions, which have fixed payments and fixed terms. There's no fixed payment nor fixed term with a merchant cash advance transaction (legally), even though in a lot of ways "we" sell it as such.