MCA Calculator: The True Cost of Your Merchant Cash Advance
MCA True-Cost Calculator
Why MCA costs are so hard to see
Merchant cash advance contracts quote a factor rate, not an interest rate. A 1.35 factor on $50,000 sounds like 35%. It is not. Because you repay in months instead of years, and because payments come out daily, the annualized cost usually lands somewhere between 60% and 200%. The calculator above does the conversion your contract never shows you.
The factor rate also hides how repayment speed changes nothing about what you owe. Pay a bank loan off early and you save interest. Pay an MCA off early and you have simply given the funder the same fee in less time, which pushes the effective annual rate even higher.
Reading your results
Total payback is your advance times the factor rate, the fixed amount the funder expects no matter what happens to your revenue. Cost of the advance is the fee in dollars. The annualized rate is what that fee works out to if it were quoted the way a loan must be quoted, using the internal rate of return on your actual payment schedule.
The number that decides whether a business survives is usually the last one: cash leaving your account each month. When that figure crosses roughly 15% of monthly revenue, most owners start borrowing to cover the payments on what they already borrowed. That is the stacking spiral, and it is the single most common situation we see.
If the math doesn't work
You have more options than the daily debits suggest. Some owners refinance, though consolidation usually costs more than it solves. Others negotiate directly. Most of the businesses we work with settle: Business Debt Adjusters has spent 11 years negotiating MCA debt, with over $500 million resolved and a 4.7-star rating across 243 Trustpilot reviews. Here is how MCA debt relief works, and here is where to get your numbers looked at for free.
Frequently asked questions
What is a factor rate on a merchant cash advance?
A multiplier applied to your advance to set the payback amount. A $50,000 advance at a 1.4 factor means you repay $70,000. It is not an interest rate, and it does not decrease if you repay early.
How do I convert a factor rate to APR?
Divide the fee by the advance, then annualize it over your actual repayment term using the payment schedule. An eight-month, 1.35-factor daily-payment advance works out to roughly a 90–100% annualized rate. The calculator above runs the precise math for your numbers.
Is a merchant cash advance more expensive than a loan?
Almost always. Bank term loans for small businesses typically run 7–12% APR. SBA loans run similar. Most MCAs annualize above 60%, and stacked advances compound the problem because each new advance pays fees on money used to service the last one.
What can I do if my MCA payments are unaffordable?
Do not take another advance to cover the first one. Get your total payback, payment schedule, and revenue in front of someone who negotiates these debts daily. A free consultation will tell you whether settlement, restructuring, or simply riding out the term is the right path.
Business Debt Adjusters is not a law firm and this page is not legal or financial advice. Calculator results are estimates based on the figures you enter.
