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Convert factor rate to APR, project payoff timeline, and see how a merchant cash advance hits your daily cash flow — all in one place.
Total payback
$70,000
Cost of capital
$20,000
Daily payment
$556
Effective APR
142.2%
126 payments over 6 months. APR is calculated by discounting each payment to present value, which is the apples-to-apples cost number you should compare against a term loan or line of credit.
A merchant cash advance (MCA) is a lump-sum payment to a business in exchange for a fixed total payback collected through daily or weekly debits. Unlike a traditional loan, MCAs are not bound by usury laws because they're structured as a purchase of future receivables, not as a loan.
The cost of capital is expressed as a factor rate — a multiplier between 1.15 and 1.50 in most cases. If you borrow $50,000 at a 1.40 factor rate, you pay back $70,000 regardless of how quickly you do it.
A factor rate looks small (1.40 sounds like 40%) but the effective APR is much higher because the full payback is collected over a short period — usually 4 to 18 months. That same 1.40 factor rate paid back over 6 months works out to roughly an 80% APR.
Use the APR mode of this calculator to see the true cost of your offer before signing. APR is the apples-to-apples number you should use to compare an MCA against a term loan, line of credit, or invoice factoring.
Most MCAs collect a fixed daily or weekly ACH debit. On a business with thin margins, this can quickly squeeze operating cash. The payment-impact mode of this calculator shows you exactly what each payment day looks like so you can stress-test the offer before accepting it.
When you start stacking multiple MCAs, the cumulative daily outflow can exceed daily revenue — FundingTracker was built to model exactly this kind of scenario across all your active advances at once.
Factor rate is the multiplier on your advance — borrow $100,000 at 1.40 and you owe $140,000. APR (Annual Percentage Rate) normalizes that cost into a yearly percentage so you can compare an MCA to a term loan or line of credit honestly.
The exact APR depends on the payback schedule because you're returning capital throughout the term, not holding it for a year. A simplified approximation: APR ≈ (factor − 1) × (365 / term_days) × 2. The calculator above uses a Newton's-method solver against the actual payment schedule for a more accurate result.
A factor rate of 1.30 over 9 months (~189 business days) works out to roughly a 75–85% APR depending on payment frequency. The shorter the term, the higher the APR for the same factor rate.
Payoff date = start date + (total payback ÷ daily or weekly payment), measured in business days for daily ACH-style MCAs or calendar weeks for weekly ones. Holdback-percent MCAs (where the funder takes a slice of every card batch) don't have a fixed payoff date — they finish whenever cumulative card sales × holdback hit the payback amount.
The payoff mode of the calculator above handles all three flavors. Feed it your funded amount, factor rate, payment cadence, and start date — you'll see the projected completion date plus a payment-by-payment running balance.
Worth noting: most MCA contracts don't discount the total payback if you pay early. The total stays the same, you just hit zero sooner. Check the prepayment clause before assuming an early payoff saves you money.
The holdback (sometimes called "specified percentage" or "retrieval rate") is the slice of daily card-batch sales the funder pulls until the total payback is met. A 15% holdback on $5,000 of daily card sales means $750/day going to the MCA.
Holdback MCAs flex with your revenue: good days collect more, slow days collect less. Fixed daily ACH MCAs do not — the funder pulls the same amount regardless of whether you had sales that day. That predictability is why most modern MCAs moved to fixed daily debits, but holdback structures still exist, especially in older contracts and card-only businesses.
MCAs are fast (often funded in 1–3 days), light on underwriting, and don't require strong personal credit. The trade-off is cost: effective APRs of 60–120% are normal. Term loans take longer, require better credit, but cost a fraction in APR terms.
Rule of thumb: if you can wait two weeks and qualify for an SBA or term loan, that's almost always cheaper. An MCA earns its keep only when the deal's upside is time-sensitive — buying inventory ahead of a holiday spike, locking in a bulk discount, or covering payroll during a known short-term receivables gap.
For a deeper side-by-side, see our MCA vs term loan comparison.
APR captures the financing cost but ignores ancillary fees. To get the true all-in cost, add: origination / underwriting fees (typically 1–10% of the advance), ACH fees (a few dollars per debit), and any bank/funder processing fees baked into your daily debit.
On a $100,000 advance with a 5% origination fee, you receive $95,000 net but still owe payback on the full $100,000 face — that bumps your effective APR by several points. Always model the net-of-fees number when comparing offers.
Quick definitions are inline below; the full alphabetical dictionary lives at /mca-calculator/glossary.
FundingTracker pulls together every advance you have open — factor rates, payoff timelines, daily cash impact — into one dashboard. Free 30-day trial. Cancel anytime.
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