MCA calculator: what an advance really costs
Enter the numbers from your offer letter to see the total payback, the cash that reaches your account, the payment, and an estimated APR you can set beside a loan. The math runs in your browser, so nothing you type is sent to us.
Where each number sits on your offer letter
Funders name the same figures differently, and a few leave some out. These are the six the calculator needs, with the names they usually go by.
Amount funded
Also called the purchase price, the funded amount or the advance amount. It is the figure before any fees come out.
Total payback
Also called the purchased amount, the receivables purchased or the total repayment. Divide it by the amount funded and you have the factor rate.
Specified percentage
Also called the holdback. It is the share of your future deposits the funder buys. Most funders turn it into a fixed payment based on your average deposits, and that payment is what the calculator uses.
Payment
Also called the remittance or the periodic payment, debited every business day or once a week. If the letter states it, type it into the payment box and the term follows.
Fees
Origination, underwriting, administration, UCC filing and wire fees, usually taken out before the money reaches you. Ask for each one in dollars if the letter does not list them.
Prior balance
On a renewal or a consolidation, part of the new advance pays off what you still owe. That money never reaches your account, yet the factor rate applies to it.
How the calculator works
It follows the same steps as a funder's disclosure. The payback is the amount funded times the factor rate. The amount financed is the amount funded less any fees taken at funding, and the cost is the payback less the amount financed. The number of payments is the payback divided by the payment, with any remainder on the last one.
The estimated APR uses the actuarial method in Appendix J of Regulation Z, the method New York's disclosure rule requires. It finds the rate per payment period at which the payments are worth exactly the amount financed, then multiplies it by the number of periods in a year: 252 for payments every business day and 52 for weekly ones.
Take $50,000 at a factor rate of 1.30 with no fees, repaid every business day over six months. The payback is $65,000 and the cost is $15,000. 126 payments of $516 clear it, and the estimated APR comes to about 109%.
- Total payback
- Amount funded × factor rate
- Amount financed
- Amount funded − fees at funding
- Cost
- Total payback − amount financed
- Number of payments
- Total payback ÷ payment
- Estimated APR
- Rate per period × 252 (daily) or 52 (weekly)
Why the APR runs so far above the factor rate
A factor rate is charged once, on the full amount, however long you take to repay. An interest rate is charged by the year on the balance still owed. An advance is paid down from the first business day, so on average you hold about half the money across the term, and the faster the payments come out, the shorter that time is.
The table shows the same $50,000 advance at 1.30, with the same $15,000 cost, collected at five speeds. The dollar cost tells you whether the advance pays for itself in the job or the stock it funds. The APR is the figure to set beside a line of credit, an equipment loan or an SBA loan.
| Term | Payments | Each payment | Estimated APR |
|---|---|---|---|
| 3 months | 63 | $1,032 | About 217% |
| 6 months | 126 | $516 | About 109% |
| 9 months | 189 | $344 | About 73% |
| 12 months | 252 | $258 | About 55% |
| 18 months | 378 | $172 | About 37% |
What funders have to show you
New York's commercial finance disclosure rule, 23 NYCRR 600, gives sales-based financing a standard table with the funding provided, an estimated APR worked out by the Appendix J method, the finance charge, the estimated total payment, the payment and the estimated term. California's commercial financing disclosure rules ask for a similar disclosure, with an annualized rate, before you sign.
As of March 2026, ten states had commercial financing disclosure laws: California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Texas, Utah and Virginia. Our guide to whether MCAs are legal covers what each one requires. If your offer came with a disclosure, check its estimated APR against this calculator with the same payment and fees. The two should be close.
Five checks before you sign
Get every fee in dollars
The factor rate leaves fees out. A 3% fee on a $50,000 advance is $1,500 you pay for and never receive.
Ask how the payment can change
A fixed payment set from your average deposits should come with a way to ask for a reconciliation if sales drop. Ask how it works and how long it takes.
Ask whether paying early lowers the total
Without an early payoff discount, the full payback is owed whenever you clear it. If there is a discount, get the schedule in dollars, in the contract.
Check what a renewal pays off
On a renewal, see how much of the new advance goes to the old balance, and whether the unpaid cost on the old one is being charged again.
Put the APR next to your other options
Set the estimated APR beside any line of credit, equipment loan or SBA loan you could get. Then send us the offer and we will look for a better one. See how Beat My Offer works.
Questions about MCA costs
MCA calculator
Multiply the amount funded by the factor rate to get the total payback. Take away the amount funded, less any fees, to get the cost in dollars. Divide the payback by the daily or weekly payment to get the number of payments, and from that the term.
It depends on how fast you repay. On a $50,000 advance with no fees and payments every business day, a 1.35 factor rate comes to about 126% a year over six months and about 63% over twelve months, by the Appendix J method this calculator uses. The dollar cost, $17,500, is the same in both cases.
The funder buys a share of your future deposits, called the specified percentage or holdback, and usually turns it into a fixed debit based on your average deposits. If your account takes in about $108,000 a month over 21 business days and the specified percentage is 10%, the payment is about $514 a day.
Only when the contract has an early payoff discount. Without one you owe the full payback whenever you clear it, so paying early saves nothing and pushes the annual rate up. The Paying off early tab shows both cases for your numbers.
Funders estimate the term from your past deposits, and some count fees or payment days a little differently. Enter the payment and the fees exactly as your disclosure states them and the two figures should land close together. A large gap usually means a different term was assumed.
It assumes a fixed payment. If your payment is a true share of each day's card sales, enter your average payment. A slow month stretches the term and lowers the APR, and a busy month does the opposite.
No. The calculator runs in your browser and sends nothing to us. The numbers are kept in the page address only so you can bookmark the page or send it to someone.
Read more about advance costs
- Factor rate vs APR: how to work out MCA costThe math by hand, the New York and California disclosures, fees and renewals.
- Merchant cash advance vs loanHow the two differ in cost, speed, paperwork and what happens when sales slow.
- MCA consolidation and refinancingWhat to do when more than one advance is coming out of the account.
- Are MCA loans legal?Disclosure laws by state, confessions of judgment and what happens if you cannot pay.
