Interest Rate vs. APR
The interest rate reflects only the cost of borrowing the principal, while APR (annual percentage rate) adds in fees to show the full annualized cost of the loan.
Two loans with the same stated interest rate can have very different APRs if one carries higher fees, which is why comparing APR, not just the interest rate, gives a more accurate way to compare the true cost of different financing offers.
Because MCAs and some alternative products use a factor rate instead of a stated interest rate, converting to an estimated effective APR is often the only way to compare those offers against a term loan or line of credit on equal footing.
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