Merchant Cash Advance Calculator
A merchant cash advance (MCA) gives a business a lump sum in exchange for a share of its future sales. The cost is set by a factor rate, and repayment comes out of daily sales through a holdback. Enter the offer to see what it really costs.
Enter your figures below. Results update as you type.
Total you repay$67,500.00$375.00 a day for about 180 business days
- Amount advanced 74%
- Cost of the advance 26%
- Cost of the advance
- $17,500.00
- Upfront fees
- $1,000.00
- Cash you receive
- $49,000.00
- Estimated time to repay
- 8.6 months
- Cost per dollar received
- 37.8 cents
- Estimated APR
- 94.6%
A merchant cash advance is a sale of future revenue, not a loan, so it has no stated interest rate. The APR is an estimate for comparing it with loans. If sales slow down, repayment takes longer and the effective APR falls.
What the advance costs
| Cash you receive | $49,000.00 | 72.6% |
|---|---|---|
| Upfront fees | $1,000.00 | 1.5% |
| Factor cost | $17,500.00 | 25.9% |
- Total you repay
- $67,500.00
- Estimated pay-off date
- Aug 2027
How the Merchant Cash Advance calculation works
Total payback = advance x factor rate; daily payment = daily sales x holdback %
A $50,000 advance at a factor rate of 1.35 means repaying $67,500, a cost of $17,500. With $2,500 of daily sales and a 15% holdback, $375 leaves the account each business day, and the advance is cleared in about 180 business days, or 8.6 months.
Because the cost is fixed up front and the money is repaid quickly, the equivalent yearly rate is high: about 95% APR in this example, after a 2% upfront fee. That figure lets you compare an advance with a loan or line of credit on the same footing.
Frequently asked questions
How is a merchant cash advance calculated?
Multiply the advance by the factor rate to get the total payback. A $50,000 advance at 1.35 is $67,500. The daily payment is your daily sales times the holdback percentage: $2,500 a day at 15% is $375.
What is a factor rate?
A multiplier that sets the total cost, usually between 1.1 and 1.5. It is not an interest rate: the cost does not shrink as you repay, and paying early usually does not reduce it.
What is the APR on a merchant cash advance?
An MCA has no stated APR because it is a purchase of future sales, not a loan. Converted for comparison, typical advances work out between about 40% and 150% a year, and sometimes more. The shorter the repayment time, the higher the APR.
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