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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.

✅ Figures verified. Factor-rate and holdback mechanics follow standard merchant cash advance contracts; APR is computed from the actual repayment schedule. Typical factor-rate ranges are market observations. Checked 8 October 2026.
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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.

Not tax or legal advice. Estimates; contract terms (fees, holdback reconciliation, prepayment discounts) vary. Not an offer of financing.
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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.

Sources: standard MCA contract mechanics; APR computed as the internal rate of return of the payment schedule (Truth-in-Lending method). Factor-rate ranges are market observations. Checked 8 October 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

$50,000 advance, 1.30 factor rate, 3% fees, fixed daily payments over 9 months, $80,000 of monthly card sales, 40% gross margin

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.

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Written by the Swift IT Sols editorial team · SWIFT SOLSRules sourced from the official authorities named on this page and last checked How we source and check calculators

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