On this site, cost of funds means the dollar price of a deal to you. For a merchant cash advance, it is payback minus advance. If fees come out of the funding, measure against the money you actually receive. Bankers use the same phrase for what a lender pays for its own money, which is a different number.
Dollar cost alone hides speed. The same $17,500 costs far more when you repay it over 6 months than over 12, because you hold the money for less time.
Example: $50,000 at a 1.35 factor rate costs $17,500. With daily debits, that is an estimated APR of about 126% over 6 months ($535.71 per business day), about 95% over 8 months ($401.79) and about 63% over 12 months ($267.86).
Look at the dollar cost and the estimated APR together before you choose.