Merchant Cash Advance Calculator

How it is calculated

A merchant cash advance is repaid as a fixed total set by the factor rate, not by interest that builds over time. The tool computes total payback = advance × factor rate, fee = total payback − advance and monthly payment = total payback ÷ term months. The advance is the cash you receive, in dollars. The factor rate is a multiplier such as 1.3, not a percentage, and it must be at least 1; a factor of 1 gives a zero fee, and a factor below 1 shows no result because an advance cannot cost less than it pays out. Term months is how long you expect repayment to take, must be above zero and can be a fraction. The advance cannot be negative. The tool does not turn the fee into an annual rate, and it assumes the payments are spread evenly. Real MCAs usually repay as a share of daily sales, so the actual term can be shorter or longer than you enter.

Common mistakes

• Comparing the factor rate directly with a loan's interest rate. A 1.3 factor is a 30% fee on the advance, but over a few months that is a far higher annual cost than 30%.
• Typing the factor as 130 or 30 instead of 1.3. The tool multiplies by what you enter and will show an absurd payback, so check that the total payback looks like the offer you were quoted.
• Entering only the fee part as the factor, such as 0.3 for a 30% fee. A factor under 1 shows no result; write a 30% fee as 1.3.
• Entering a long term to make the monthly payment look small. The fee does not shrink with a longer term, only the payment does.
• Ignoring origination or processing fees that are deducted from the advance, which means you receive less cash than the advance amount used here.