Owners who call us with half a million dollars or more in merchant cash advances almost never know their weekly number. They know each funder's debit, and they know the account is empty by Thursday. This model adds the stack up the way the bank account feels it, then asks the question that decides what happens next: how much revenue does it take for the business to carry it?
Key findings
- A business that owes about $557,000 across five merchant cash advances pays $5,033 every business day: $25,166 a week and $105,698 a month.
- For net profit alone to cover those debits, the business needs about $1.2 million a month in revenue at the 8.56% average net margin of U.S. non-financial companies, and about $2.8 million a month at trucking's 3.79% average.
- Priced as APR-equivalents, the five advances run from 63% to 205%. The later, smaller advances cost the most.
- In six months the daily debit grew 3.8 times ($1,339 to $5,033) while the cash received grew 2.5 times ($250,000 to $625,000).
- Scaled to other balances, every $500,000 owed in a stack shaped like this one costs about $22,600 a week; $1,000,000 costs about $45,200 a week.
How the model works
The model follows one illustrative business through five advances. It takes a first advance of $250,000 in month zero, then four more over the next six months as the debits squeeze cash. Each later advance is smaller, priced higher and shorter, which is the pattern stacking usually follows because each funder prices the risk it sees in the bank statements, including the debits already going out.
Every advance is repaid by a fixed debit every business day. The model uses 21 business days a month and 252 a year, the same conventions as our MCA cost calculator. The APR-equivalent is the daily rate that makes the stream of debits worth the cash advanced, multiplied by 252. The model leaves out origination and underwriting fees, which many contracts deduct at funding; including them would push every APR-equivalent higher.
The snapshot is taken in month six, the month the fifth advance funds. That is the point where all five debits run at once and the balance owed is at its highest.
The five advances
| Position | Month funded | Cash received | Factor rate | Term | Payback | Daily debit | APR-equivalent | Owed in month 6 |
|---|---|---|---|---|---|---|---|---|
| Advance 1 | Month 0 | $250,000 | 1.35 | 12 months | $337,500 | $1,339 | 63% | $168,750 |
| Advance 2 | Month 2 | $150,000 | 1.40 | 9 months | $210,000 | $1,111 | 95% | $116,667 |
| Advance 3 | Month 4 | $100,000 | 1.45 | 7 months | $145,000 | $986 | 136% | $103,571 |
| Advance 4 | Month 5 | $75,000 | 1.49 | 6 months | $111,750 | $887 | 171% | $93,125 |
| Advance 5 | Month 6 | $50,000 | 1.49 | 5 months | $74,500 | $710 | 205% | $74,500 |
| Stack | $625,000 | $878,750 | $5,033 | $556,613 |
Together the five advances put $625,000 in the account and require $878,750 back, a cost of $253,750. In month six the business still owes $556,613.
How much does a $500,000 MCA stack cost each day?
In this model, $5,033 every business day. That is $25,166 a week and $105,698 a month. Of each month's debits, about $31,412 is the cost of the money and about $74,286 repays the cash advanced.
That split matters. The cash advanced was spent on payroll, inventory, fuel or an earlier funder, so it is gone. Repaying it has to come from profit, from savings, or from new borrowing. A business that cannot cover the whole debit out of profit is shrinking its cash every week the stack runs, and the usual way to refill the account is the next advance.
Daily debit as each advance is added
Total debited every business day, by month. The model stops adding advances after month six.
How much revenue does it take to carry the stack?
The test is simple: divide the monthly debits by the business's net margin. The answer is the monthly revenue at which profit alone would cover the debits without drawing down cash or borrowing again. The table uses each industry's average net margin from NYU Stern's January 2026 data set.
| Industry | Companies in average | Average net margin | Monthly revenue needed | Annual revenue needed |
|---|---|---|---|---|
| Trucking | 26 | 3.79% | $2,789,000 | $33,470,000 |
| Engineering and construction | 48 | 5.94% | $1,779,000 | $21,350,000 |
| Restaurants | 64 | 9.37% | $1,128,000 | $13,540,000 |
| Auto dealers and parts retail | 34 | 3.36% | $3,146,000 | $37,750,000 |
| Business and consumer services | 155 | 7.03% | $1,504,000 | $18,040,000 |
| Healthcare support services | 104 | 1.25% | $8,456,000 | $101,470,000 |
| All U.S. non-financial companies | 4822 | 8.56% | $1,235,000 | $14,820,000 |
Monthly revenue needed for profit to cover the debits
Monthly debits of $105,698 divided by each industry's average net margin.
These margins come from public companies, which are larger and usually more profitable than the businesses that take merchant cash advances. A trucking company at its industry's average 3.79% margin would need about $2.8 million a month, roughly $33 million a year, before profit could carry this stack. Most businesses that owe this much to funders are far smaller than that, which is why the debits come out of working capital, tax deposits and payroll instead.
Debits as a share of revenue
| Monthly revenue | Debits as a share of revenue |
|---|---|
| $500,000 | 21.1% |
| $1,000,000 | 10.6% |
| $2,000,000 | 5.3% |
| $3,000,000 | 3.5% |
At $1,000,000 a month in revenue, the stack takes 10.6% of every dollar that comes in. For most businesses that is more than their entire profit margin.
Why stacks grow faster than the cash they bring in
The first advance in the model costs $1,339 a day for $250,000 of cash. The fifth costs $710 a day for $50,000. Per dollar received, the fifth advance's daily debit is 2.6 times the first one's, because it is priced higher and repaid over less than half the time.
That is how the stack's daily debit grows 3.8 times in six months while the cash received grows only 2.5 times. Each new advance solves this week's shortfall by making every later week worse. Our guide to MCA stacking walks through the same spiral from the owner's side.
Scaling the model to other balances
If the mix of prices and terms stays the same, the debits scale with the balance owed. In this model the weekly debit is 4.52% of the balance owed in month six.
| Balance owed | Weekly debits | Monthly debits | Revenue needed at 10% margin | Revenue needed at 5% margin |
|---|---|---|---|---|
| $250,000 | $11,300 | $47,500 | $475,000 | $949,000 |
| $500,000 | $22,600 | $94,900 | $949,000 | $1,899,000 |
| $750,000 | $33,900 | $142,400 | $1,424,000 | $2,848,000 |
| $1,000,000 | $45,200 | $189,900 | $1,899,000 | $3,798,000 |
| $1,500,000 | $67,800 | $284,800 | $2,848,000 | $5,697,000 |
| $2,000,000 | $90,400 | $379,800 | $3,798,000 | $7,596,000 |
Run your own stack
Enter what each funder is still owed and what it takes out, daily or weekly. The calculator runs in your browser and sends nothing to us. It starts filled in with the model's five positions.
| Funder | Balance still owed | Payment | How often |
|---|
- Total still owed$0
- Debits per week$0
- Debits per month$0
- Share of monthly revenue0%
- Monthly net profit at that margin$0
- Monthly shortfall the profit does not cover$0
- Months until the last funder is paid at this pace0
Months use 21 business days or 4.33 weeks. Estimates only; default fees, renewals and reconciliations change the real numbers.
Limits of this model
- It is one illustrative stack, not a sample of real contracts. Real factor rates, terms and fees vary by funder and by business.
- Some advances collect a percentage of card sales instead of a fixed debit. Many contracts also allow a reconciliation that lowers payments when sales fall; the model assumes fixed debits because that is how most of the stacks we see are collected.
- Industry margins are public-company averages. A small private business in the same industry may earn more or less.
- Nothing here is legal, tax or accounting advice.
What owners carrying a stack this size can do
A stack this size is rarely fixed by one more advance. The paths that work at this size are a coordinated restructuring with every funder at once, a negotiated settlement paid from a sale, new equity or long-term debt, and in some cases a Subchapter V bankruptcy handled by a bankruptcy attorney. Our guide to MCA debt over $500,000 explains how each one works. For a free, confidential first conversation about your own stack, call (407) 993-1416.
Questions and answers
How much does a $500,000 merchant cash advance stack cost per day?
In our model, a five-position stack that owes about $557,000 debits $5,033 every business day, or $25,166 a week. Scaled to the same shape, every $500,000 owed costs about $22,600 a week. Your own number depends on each contract's payment and term.
How much revenue does a business need to carry a $500,000 MCA stack?
For net profit alone to cover the debits in our model, about $1.2 million a month at the 8.56% average net margin of U.S. non-financial companies, or about $949,000 a month at a 10 percent margin per $500,000 owed. Businesses below that level pay the debits out of working capital.
Why do merchant cash advance stacks keep growing?
Each later advance is usually smaller, priced higher and repaid over a shorter term, so it adds more daily debit per dollar received than the one before. The new cash covers this week's shortfall and makes every later week tighter, which leads to the next advance.
What is the APR on a merchant cash advance stack?
In our model the five advances range from about 63% to 205% as APR-equivalents, before any fees deducted at funding. Merchant cash advances are not loans and do not state an APR unless a state disclosure law requires an estimate, so the figure is a comparison tool, not a contract rate.
Sources
- Aswath Damodaran, NYU Stern School of Business, “Operating and Net Margins by Industry Sector (US),” data as of January 2026. pages.stern.nyu.edu
- Hamilton & Merchant, MCA cost calculator (method for the APR-equivalent). hamiltonmerchant.com/mca-calculator/
About this study
An illustrative model, not a survey of real contracts. Five advances are priced inside the factor-rate range published by the sources below, with daily debits over 21 business days a month. Industry margins are public-company averages from NYU Stern (data as of January 2026).
How to cite: Hamilton & Merchant Research, “What a $500,000 Merchant Cash Advance Stack Costs,” October 8, 2026, https://hamiltonmerchant.com/research/mca-stack-cost-model/
Download the data (CSV) · Free to reuse with attribution under CC BY 4.0. Found an error? Email [email protected] and we will correct it and date the change.