Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

kirby,
Let's try it another way.
Assumptions (simplified version):
Company has one customer to whom it sells $1,000,000 worth of goods a month.
Factor charges a flat rate of 1.5%.
Instead of waiting 30 days for payment from the customer, the factor pays on day one.

So the company pays $15,000 for the privilege of having access to $1,000,000 a month longer than it normally would.

It does this 12 times a year. So the company pays $180,000 for the privilege of accessing an ongoing float of $1,000,000.

It seems pretty clear that a $1,000,000 loan that costs $180,000/yr is being charged at a simple APR of 18%. And that is the way the cost of factoring can also be viewed.