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MCA cost calculator

Turn a factor rate and a term into the payback amount, the daily or weekly debit, the cost of capital, the share of revenue it consumes, and the annualized rate you can compare against a loan.

A vintage brass adding machine on a walnut desk beside a curl of receipt paper
The cash that actually landed in the account, after any fees deducted at funding.
Payback divided by advance. Most contracts fall between 1.20 and 1.50.
If the contract only states a daily payment, divide the payback by that payment to get business days, then by 21 for months.
Shows what share of monthly revenue the debits consume.
Total payback
$67,500

189 business days of debits

  • Per business day$357
  • Per month$7,500
  • Cost of capital$17,500
  • Simple annualized cost46.7%
  • APR-equivalent84.1%
  • Share of monthly revenue8.8%

The APR-equivalent is the periodic rate that makes the stream of payments worth the advance today, annualized over 252 business days or 52 weeks. Estimates only; your contract's fees and default terms change the real cost.

How the calculator works

Payback is the advance multiplied by the factor rate. The debit is the payback divided by the number of payments in the term, using 21 business days a month for daily debits and 4.33 weeks a month for weekly ones. Cost of capital is payback minus advance. The simple annualized cost spreads that cost over a year as if the money were repaid at the end of the term. The APR-equivalent is the rate that makes the stream of daily or weekly payments worth the advance today, which is how a loan's annual percentage rate is calculated, and it is the figure to compare against a bank line or a term loan.

Why the two annual figures are so far apart

A factor rate is applied to the whole advance for the whole term, but the merchant does not have the whole advance for the whole term. From the first business day the balance starts going back to the funder, so on average the business has use of only about half the money for the term while paying a cost calculated on all of it. That is why a $50,000 advance at a 1.35 factor over nine months has a simple annualized cost of about 47 percent and an APR-equivalent of about 84 percent. Shorten the term to six months and the APR-equivalent climbs past 140 percent at the same factor.

What the numbers do not include

  • Origination, underwriting, or ACH fees deducted from the advance, which raise the true cost. Enter the amount you actually received to account for them.
  • Default fees, legal fees, and acceleration if a payment bounces.
  • The cost of a second advance taken to cover the first. Run each advance separately and add the monthly debits to see the combined load on the operating account.

Reading your own contract

You will find the advance amount, the purchased amount or payback, and the daily or weekly payment on the first page of most MCA agreements. The factor rate is the payback divided by the advance. The term is rarely stated outright; it is the payback divided by the daily payment, in business days. Our glossary defines the rest of the vocabulary, and our post on the nine clauses that will hurt you walks through the rest of the document.

If the monthly debit is more than the business clears in margin, call.

That is the point at which the stack starts feeding itself. Call or text (407) 993-1416, or read how MCA relief works.

The first call is free

One conversation.

Thirty minutes on the phone, confidential and direct. You walk us through the debts and what is happening in the business. We tell you what we see, which options fit, and whether we are the right firm to run them. No pitch, no upfront fees.

(407) 993-1416 Call or text. Monday to Friday, 9 a.m. to 6 p.m. Eastern. After-hours texts are returned the next business morning.
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