How To Use This Merchant Cash Advance Calculator
The calculator updates as you type, so you can test different offers in seconds.
- Enter the advance amount. This is the money the provider sends you.
- Enter the factor rate. It's the multiplier on your offer, written as a decimal such as 1.3. If your offer shows a total payback instead, divide it by the advance: $65,000 ÷ $50,000 = 1.3.
- Enter your monthly card sales. Use your average debit and credit card sales over the last few months, not your best month.
- Enter the holdback. This is the percentage of your card sales the provider keeps until the advance is repaid.
- Review your estimate. You'll see the cost of the advance, the total payback, how much is held back each business day, how long repayment takes and the APR equivalent. The tables under the calculator compare factor rates and show what happens if your sales rise or fall.
Before you sign, use the "See if you qualify" button to compare it with other business financing. It won't affect your credit score.
How A Merchant Cash Advance Works
With a merchant cash advance (MCA), a provider gives your business a lump sum in exchange for a share of your future card sales. Instead of fixed payments, the provider keeps a set percentage of each day's card settlements, the holdback, until it has collected the agreed payback. Because an MCA is usually structured as a purchase of your future sales rather than a loan, it's priced with a factor rate, not an interest rate, and the offer usually doesn't show an APR.
Three numbers decide what you pay:
- The factor rate sets the cost. Payback = advance × factor rate, and the cost is fixed the day you sign: a $50,000 advance at a 1.3 factor rate costs $15,000, however long it takes to repay.
- The holdback sets the speed. At 15% of $60,000 in monthly card sales, about $428.57 is kept each business day, so the $65,000 is repaid in about 7 months (152 business days).
- Your sales move the speed up or down. A slow month means smaller remittances and a longer repayment; a busy month, the opposite.
How The Calculator Works Out The APR
A factor rate of 1.3 looks like 30%, but it isn't 30% a year. You pay the $15,000 cost over about 7 months, and you start repaying the next business day, so on average you only have about half the money for that time. To compare it with a loan, the calculator treats each day's remittance as a payment on a loan of the advance and finds the yearly rate that matches: roughly 90.9% for this example.
- Payback = advance × factor rate.
- Held back each business day = monthly card sales × holdback ÷ 21 business days.
- Business days to repay = payback ÷ the daily amount, and the last day is whatever is left.
- APR equivalent = the daily rate at which those remittances repay the advance, × 252 business days a year.
It's an estimate, because your real sales won't be the same every day. What it shows reliably is the direction: the faster you repay, the higher the yearly cost.
Factor Rates Compared
For a $50,000 advance repaid from 15% of $60,000 in monthly card sales:
| Factor rate | Cost | Total payback | Time to repay | APR (estimate) |
|---|---|---|---|---|
| 1.1 | $5,000 | $55,000 | About 6 months | 37.8% |
| 1.2 | $10,000 | $60,000 | About 7 months | 67.3% |
| 1.3 | $15,000 | $65,000 | About 7 months | 90.9% |
| 1.4 | $20,000 | $70,000 | About 8 months | 109.9% |
| 1.5 | $25,000 | $75,000 | About 8 months | 125.4% |
Why A Higher Holdback Costs More A Year
The holdback doesn't change the cost in dollars, but it changes how fast you pay it. On the same $50,000 advance at a 1.3 factor rate:
- 10% holdback: about $285.71 a business day, repaid in about 11 months, roughly 60.7% as an APR
- 15% holdback: about $428.57 a business day, repaid in about 7 months, roughly 90.9%
- 20% holdback: about $571.43 a business day, repaid in about 5 months, roughly 120.9%
A higher holdback also takes a bigger bite out of every sale, which can squeeze your cash flow in a slow stretch. Make sure what's left after the holdback still covers rent, payroll and suppliers. Some advances take a fixed daily or weekly payment instead of a percentage; to estimate one, enter the holdback that matches that payment (daily payment × 21 ÷ monthly sales × 100).
Merchant Cash Advance Vs. Business Loan
The same $50,000 as a one-year business term loan at 20% costs $5,580.70 in interest, about $4,632 a month. The 1.3 factor rate advance costs $15,000 and is repaid faster. An MCA can still make sense: approval is based mostly on your card sales, funding is fast, and payments shrink when sales slow down. But if you can qualify for a loan or a line of credit, it will almost always cost less. Run your loan offer through the business loan calculator, and see merchant cash advance vs. business loan for the full comparison.
Before You Sign A Merchant Cash Advance
- Ask for the total payback in dollars. And every fee on top of it, such as administration or underwriting fees. Fees aren't in the calculator, so add them to the cost.
- Ask what happens if you repay early. With most advances the cost is fixed, so paying faster doesn't save you anything unless the contract offers a discount.
- Check the reconciliation terms. If your sales drop, can the daily amount be adjusted to match? A fixed daily debit doesn't shrink with your sales.
- Watch for stacking. Taking a second advance to cover the first one multiplies the holdback and the cost.
- Read the guarantees. Many contracts include a personal guarantee or a claim on business assets. See are merchant cash advances a scam? for the red flags.
Comparing your options? See the best small business loans in Canada.