Merchant Cash Advance Calculator
Convert a merchant cash advance factor rate into a real APR: total payback, cost and fees, daily or weekly payment or holdback, term, share of revenue, the extra sales needed to cover the cost and a comparison with a 15% loan.
| Total payback | — |
|---|---|
| Cost of capital | — |
| Net cash received | — |
| Payment | — |
| Estimated term | — |
| APR equivalent | — |
| Simple annualised cost | — |
| Share of monthly revenue going to repayment | — |
| Extra sales needed to cover the cost | — |
| Same money as a 12-month loan at 15% | — |
In short
A merchant cash advance quotes a factor rate — repay $1.30 per $1 advanced, for example — rather than an interest rate, and because repayment starts immediately through daily or weekly debits the APR equivalent is typically 40–150%: a 1.30 factor over 9 months of daily payments is roughly an 80% APR. The cost is fixed regardless of early repayment, which is why MCAs should be a last resort after SBA loans, lines of credit and factoring.
Who this is for: US merchants offered a cash advance who want the real APR before signing.
Factor rate vs APR
- Factor rate 1.30 means you repay $1.30 for every $1 advanced — a fixed $15,000 on $50,000 — however quickly you pay. On a 9-month daily schedule that is roughly an 80% APR, not 30%.
- Why the APR is so high: you start repaying the next day, so on average you only hold about half the money for half the term; the cost is also charged on the gross advance while fees reduce what you receive.
- Holdback deals take a fixed percentage of card sales until the payback is met — the term flexes with sales, the cost does not.
- Red flags: confessions of judgment, daily debits that exceed 10–15% of revenue, renewal offers before payoff ("double dipping"), and brokers with 5–10% fees.
- Cheaper options: SBA 7(a) or Express (9–13%), bank or online lines of credit (10–30%), invoice factoring (25–60%), equipment loans secured on the asset.
See also: SBA 7(a) Loan Calculator 2026.
Assumptions
- Payback = advance × factor rate; net cash = advance − fees; fixed daily payments over 21 business days a month, weekly over 52/12 weeks, or holdback = % of daily card sales.
- APR = internal rate of return of the payment stream against net cash (252 daily or 52 weekly periods a year).
- Loan comparison: 12-month amortising loan at 15% on the same net cash.
Worked example
Payback $65,000 — a $15,000 cost plus $1,500 of fees on $48,500 received. 189 daily payments of $344 (about $7,222 a month, 9.0% of sales). APR equivalent about 82%; the "simple" annualised cost is 45%. You would need $41,250 of extra sales at a 40% margin just to cover the cost. The same $48,500 as a 12-month loan at 15% would cost $4,030 of interest — about $12,500 less.
Frequently asked questions
What APR is a 1.3 factor rate?
It depends on the term: about 80% APR over 9 months of daily payments, 55% over 12 months, 120%+ over 6 months. The factor rate alone hides the true cost.
Can I pay off a merchant cash advance early?
You can, but the payback amount is fixed, so early repayment only saves money if the contract includes a prepayment discount.
Is an MCA a loan?
Legally it is a sale of future receivables, which is why it is not regulated as a loan in most states and can carry triple-digit APRs; California, New York and a few others now require APR-style disclosures.
Is a merchant cash advance a bad idea?
It is the most expensive mainstream financing; it only makes sense for a short, high-return need when nothing cheaper is available — and never for covering an existing advance.
What is a holdback?
The percentage of daily card sales (often 10–20%) the processor diverts to the funder until the payback amount is met.
Can I renegotiate an MCA?
Some funders offer reconciliation if sales fall; many contracts include confessions of judgment, so get legal advice before defaulting.
Related calculators
See all United States calculators → · All free online calculators
Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.