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Merchant Cash Advance (MCA) Calculator

Calculate Your Payments and Total Cost of Borrowing

Merchant Cash Advance Qualifications

  • Time in Business:6 Months+
  • Annual Revenue: $75,000+
  • Credit Score:500+

Get pre-approved today, so you have the funds you need tomorrow.

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Table of Contents

  • Merchant Cash Advance Calculator: Estimate the Cost
  • Fundamentals: What It Is & How It Works
  • What Is a Merchant Cash Advance?
  • Using the MCA Calculator
  • When to Consider an MCA
  • Final Thoughts

Merchant Cash Advance Calculator: Estimate the Cost

Sometimes a short term expense puts a small business owner in need of immediate cash. While a loan might seem like the obvious solution, the timing, terms and conditions don’t always fit the needs of a small business owner. But there is another financing option available: the merchant cash advance (MCA).

An MCA is not a loan, but an advance. When you enter into an agreement with an MCA lender, you receive a sum of cash in exchange for a percentage of your future sales.

If you’re considering this form of financing, start here with our MCA calculator. By plugging a few numbers into this easy-to-use tool, you’ll come away with a better understanding of what your repayments might look like and the total cost of borrowing.

Get to the Bottom Line of a Merchant Cash Advance with the MCA Calculator

The fee and repayment structures of MCAs can make them difficult to understand. What’s more, contracts are often loaded with unfamiliar terms. So before you use our MCA calculator, it’s important to understand the logic behind the numbers. Here’s what you need to know:

What Is a Merchant Cash Advance?

In years past, MCAs were most commonly used by restaurateurs and retailers whose revenue came primarily from credit and debit card sales. In this traditional form of MCA financing, a lender advances a small business a sum of cash and that debt is repaid by remitting a percentage of daily credit and debit card sales, known as a “holdback,” to the lender.

Since the remittance is taken as a percentage, the amount sent to the funder rises and falls as sales fluctuate. To illustrate how this works, let’s review an example:

While this form of MCA funding is still in use today, it has been eclipsed by its modern-day equivalent: the ACH merchant cash advance.

What Is an ACH Merchant Cash Advance?

An ACH advance is nearly identical to a merchant cash advance. The primary differences are how  lenders assess funding worthiness, how the terms are structured and how the advance is repaid.

Instead of reviewing an applicant’s credit card processing statements to decide whether or not to fund, and how much,  an ACH MCA lender will review the small business’s deposit and cash flow statements to calculate the advance amount.

The advance is then repaid through daily or weekly debits from the business’s bank account, known as Automated Clearing House (ACH) withdrawals. These remittances are fixed and occur over a set term, usually ranging from 3 to 18 months.

Because ACH advances are based on a business’s overall sales, its applicable to all small business owners—not just those with high credit and debit cards sales.

Now that we’ve defined merchant cash advance and its variations, let’s examine its fee structure.

Merchant Cash Advance Fee Structure

Merchant cash advance fees are calculated using a “factor rate.” Because factor rates aren’t used in consumer lending, many business owners are less familiar with this fee structure and how it’s calculated. So let’s take the time to define it here.

Factor rates are expressed as a decimal figure rather than a percentage, and typically range from 1.10 to 1.30. The factor rate is used to calculate the MCA fee, which is a percentage of the original advance amount, not a fee based on depreciating principal. For this reason, the cost of MCA financing remains the same, whether you pay off an advance in 3 months or six.

How to Calculate MCA Factor Fees

Say you get a $20,000 cash advance at a 1.20 factor rate. To determine how much you will pay back to the MCA provider, multiply the cash advance amount by the factor rate.

In this instance, the calculation would be: $20,000 X 1.20 = $26,000

You would pay $26,000 to the MCA provider for borrowing $20,000. That means the cost of the advance is $6,000.

How Lenders Determine MCA Factor Rates

Unlike other short-term funding options, the creditworthiness of your business holds less clout when determining advance amounts and factor rates. What’s most important in MCA financing is projected sales. As a result, you can expect lenders to perform a thorough examination of your company’s deposit, credit card processing and cash flow statements.

In addition, a lender will consider:

  • Industry: Different industries present different levels of risk to MCA providers. For example, sectors that routinely experience periods of high and low sales are riskier for lenders to work with, resulting in potentially higher factor rates.
  • Length of time in business: Most MCA lenders require small businesses to be in operation for a minimum of 6 months. Typically, the younger the business, the higher the factor rate.
  • Business sales and growth: An MCA provider will perform a financial assessment of your ability to repay the advance. As MCAs are based on future revenues, showing consistent sales and a proven history of growth bodes well for favorable rates and terms.
  • Business credit history: Because an MCA is an advance, your business’s credit score is less of a deciding factor, but it still comes into play. In general, the better your business credit score, the lower your factor rate.

Using the ACH Merchant Cash Advance Calculator to Estimate Remittance Payments and Total Advance Cost

Now that we’ve provided background for the MCA calculator, here’s how to get the most out of the tool. (Before you get started, it’s important to note that this calculator is for ACH transactions only.)
Step 1: Enter the desired Advance Amount.
Step 2: Enter the Estimated Factoring Rate. These rates typically fall within the 1.10 to 1.30 range.
Step 3: Select the Estimated Term. The typical repayment period for a merchant cash advance is 9 months. But the term can be as short as 3 months and as long as 18 months.
Step 4: Calculate. The ACH merchant cash advance calculator will output:

  • Estimated Remittance Payment. You can toggle between a daily or weekly frequency.
  • Total Payment. The total amount you have to pay. This number is inclusive of the advance amount and the fixed factor fee.
  • Cost of the Advance. The amount you pay in fees for borrowing.

We encourage you to experiment with different advance amounts, factor rates, terms and remittance frequency. This way, you have a full understanding of the potential cost of funding—and what your cash flow can and cannot bear.

When to Consider a Merchant Cash Advance

Merchant cash advances make the most sense as a financing option for short-term cash flow issues, such as making payroll or rent. However, they can be used for many business expenses, including financing a piece of equipment, purchasing inventory or pursuing a time-sensitive opportunity.

Before moving forward with a merchant cash advance, take a hard look at your sales projections and cash flow. An MCA is only a good fit for your business if you’re confident you can satisfy the daily or weekly remittance with enough cash left to run your business and fulfill your other financial obligations.

Before coming to terms on an MCA agreement, carefully weigh the pros against the cons:


✔ Quick Access to Financing: An MCA is a good option if you’re temporarily short on funds and need to cover an expense quickly. The application and underwriting process is streamlined, allowing you to apply, qualify and receive funding, sometimes as soon as the same day.

✔ Easier Qualification Requirements: As we covered in detail above, merchant cash advances have less stringent qualification requirements. For this reason, MCAs are a viable option for new businesses in operation for 6 months or longer or establishments previously turned down for other forms of financing.

✔ No Collateral Required: Unlike other types of funding, you won’t have to put up collateral against the amount you borrow. However, the MCA provider may require a personal guarantee, which is a written agreement that makes you personally responsible for repaying the advance. If this is the case, the MCA provider may still try to recoup any losses.


✘ Higher Rates & Fees: There are real risks involved in advancing funds to a broader pool of business owners. For this reason, MCAs are considered one of the most expensive financing options, with high rates and fees.

✘ Disruption of Cash Flow: Payments are remitted to lenders on a daily or weekly basis. Before you come to terms on a merchant cash advance agreement, be sure your cash flow can accommodate the recurring draws.

✘ No Benefit to Early Repayment: Since you have to repay a fixed amount of fees, you get no interest savings from early repayment.

Use the MCA and Other Small Business Loan Calculators to Explore Financing Options

Ultimately, the right financing option for your small business will depend on your unique needs and your qualifications. If you need fast access to capital, a merchant cash advance may be the right funding option for you. As you consider your opportunities, a small business loan calculator is a great place to start. By gaining an understanding of your estimated payments and the total cost of borrowing, you can easily compare lending types and make an informed funding decision.

When you’re ready, apply. The Fast Capital 360 online application is simple and streamlined. All it takes is one form and a few minutes of your time to be matched with the best financial products on the market. From there, a dedicated business advisor will walk you through the funding options you qualify for, and help you pinpoint the product best-suited to your need. Ready to find out more? Call us at (800) 735-6107 or click here to speak directly with one of our dedicated advisors.