Merchant Cash Advance Calculator: Find the True Cost of an MCA

A merchant cash advance is not a small-business loan; rather, it’s a cash advance in exchange for a cut of your future business sales.

Instead of making monthly installment payments over a set period of time, you make daily or weekly payments, plus fees, until the merchant cash advance is paid in full.

Rather than interest rates, MCAs carry factor rates, which do not represent the total cost of borrowing, also known as the annual percentage rate. When you include origination or closing fees along with the factor rate, APRs for merchant cash advances can reach triple digits. And the daily or weekly repayment schedule can cause cash flow problems for your business if your sales tend to be erratic or you hit a rough patch.

Using an MCA calculator can help you determine the total cost of borrowing and whether a merchant cash advance makes sense for your business.

MCA calculator

How to use this merchant cash advance calculator

Merchant cash advance amount:

• Enter the total dollar amount you’re borrowing.

Payback terms:

• If you know your factor rate, select that option. The factor rate typically ranges from 1.2 to 1.5. A higher factor rate corresponds to higher fees you’ll pay on the merchant cash advance.

• In the “factor rate” field, enter that number.

• If you don’t know your factor rate, select “total payback amount” and enter the amount in the next field.

Payment is based on:

• Select either monthly credit/debit card sales or fixed daily payment.

• If you choose monthly credit/debit card sales, enter your estimated monthly credit or debit card sales in the next field.

• In the “percent of monthly credit/debit card sales” field, enter the percentage amount (example 10%) that the merchant cash advance provider will deduct from your monthly credit or debit cards until the total borrowed amount is repaid.

• If you choose fixed daily payment, enter the amount you expect to repay daily in the next field.

Understanding your results

The approximate daily payment of: This is the amount you can expect to pay daily until your MCA is paid back in full.

For the period of: This is how long it’ll take to repay the MCA.

A total payback amount of: This is the total amount that you’ll pay for financing, including fees.

With an effective APR of: This is the total annual percentage rate of interest you’ll pay on the borrowed amount per year.

» MORE: Best merchant advance companies

What is APR and why is it important?

APR, or annual percentage rate, is a rate that represents the total cost of borrowing money. Unlike the factor or interest rate alone, it paints a better picture of how much you will pay for your loan because it includes fees, closing costs and insurance costs.

Understanding the total cost of borrowing money allows you to compare the best options, and ultimately make the best financing decision for you and your business.

Alternatives to MCAs

If after using our MCA calculator you find that the total cost of a merchant cash advance is too high for you, here are some other financing options.

• If you need fast financing: Online lenders, like Fundbox or Fora Financial, offer loans that may have more favorable terms than MCAs, and can be funded in as little as 24 hours. 

• If you’re struggling to qualify for a traditional loan: If you lack collateral or are facing credit challenges that are preventing you from qualifying for a traditional loan, lenders like Accion and Bank of America offer loans to borrowers with poor credit and without collateral, respectively. 

• If you need revolving funding: Business lines of credit offer revolving financing that can be simpler and less expensive than MCAs. Many of them don’t require stellar personal credit, and some can approve lines up to $250,000.