MCA Cost Calculator: Factor Rate, True Cost & APR
Enter a merchant cash advance offer and see the total cost, effective APR, and daily debit — the numbers most brokers won't show you upfront. Use this one before you sign; if you already have an advance and want to pay it off early, use the MCA early payoff calculator instead. Updated for 2026 factor-rate norms.
Your offer
Typical range: 1.15 – 1.55
Most MCAs pay off in 4 – 12 months
Deducted from your advance at funding
Used for the debit check below. 2,500 is an example, enter your own.
Your true cost
Payment schedule
Daily payment vs. your daily deposits
Our rule of thumb: a debit above 8 to 10% of average daily deposits deserves a stress test against a slow month. This is an estimate from the numbers you enter, not a quote. If payments are already hard to cover, see what to do if you can't pay your MCA.
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How this calculator works
A merchant cash advance isn't a loan and doesn't carry an interest rate — it uses a factor rate (usually 1.15 to 1.55) applied to the advance to determine total payback. That structure hides the annualized cost. The APR your offer really carries depends on how fast you pay it back:
- Payback = advance × factor
- Net funded = advance − origination/wire/ACH fees deducted at close
- Total cost = payback − net funded
- Effective APR ≈ (total cost ÷ net funded) × (365 ÷ days to payoff) × 100
A $50,000 advance at 1.35 factor with 3% fees, paid in 6 months, nets you $48,500 and costs $19,000 — that's an effective APR near 78%, not the "35%" a rushed broker might imply. Stretch the same deal to 12 months and the APR drops to ~39%. The single biggest lever on true cost is term length, not factor.
What to compare before you sign
- Two or three MCA offers side-by-side — different funders quote wildly different factors for the same file.
- MCA vs a business line of credit — a $50k LOC at 18% APR that you draw and repay costs a fraction of a same-size MCA. Full comparison here.
- MCA vs SBA — if you can wait 2–6 weeks and clear the underwriting box, SBA prices at 10–13% APR. Compare terms.
- Prepayment discount — some funders discount the factor if you pay early; many don't. Ask in writing before you sign.
When an MCA actually makes sense
Short-cycle, high-ROI use cases: buying inventory that turns in 30–60 days, funding a job with a signed contract, bridging a known receivable, or covering a seasonal spike in demand. The math works when your incremental gross profit on the capital exceeds the total cost — not the APR. If you're borrowing $50k to cover payroll with no offsetting revenue lift, an MCA will make the cash-flow hole deeper. In that case, a line of credit or SBA is the right call.
For more on how MCA pricing actually gets set, read factor rates explained, or see when an MCA is worth it.
Frequently asked questions
How do you calculate the true cost of an MCA?
Multiply the advance by the factor rate to get total payback, subtract any fees deducted at funding to get net funded cash, then take payback minus net funded as your total cost. To annualize it: (total cost ÷ net funded) × (365 ÷ days to payoff) × 100 gives you the effective APR.
What is a good factor rate in 2026?
1.15–1.25 is strong pricing and usually requires 12+ months in business, $30,000+ in monthly deposits, and no other open positions. 1.26–1.40 is the market norm. Above 1.45 you are being priced as high risk — get a second and third quote before signing.
Is a 1.35 factor rate the same as 35% interest?
No, and this is the most expensive misunderstanding in the industry. A 1.35 factor paid back over 6 months is roughly a 78% effective APR, because you repay the full 35% markup in half a year rather than over twelve months. Stretch the same deal to 12 months and it drops to about 39%.
Does paying an MCA back faster reduce the cost?
No — the payback total is fixed at signing, so faster repayment actually raises your effective APR. The only exception is a negotiated prepayment discount, which some funders offer at 5–15% off the remaining balance. Get it in writing before you wire the payoff.
What fees should I look for on an MCA term sheet?
Origination or underwriting fee (2–5% deducted at funding), ACH or wire fee, and sometimes a monthly servicing or platform fee. These reduce the cash you actually receive while you still repay the full payback amount, so always run the numbers on net funded, not the headline advance.
Is an MCA cheaper than a business line of credit?
Almost never. A $50,000 line of credit at 18–36% APR costs a fraction of a $50,000 MCA at a 1.35 factor over 6 months. MCAs win on speed and on approval odds when credit or time in business rules out a line of credit — not on price.
How much of my daily deposits should an MCA payment take?
There is no legal limit, so this is our rule of thumb: a daily debit above 8 to 10% of your average daily deposits is worth stress-testing against a slow month. Enter your average daily deposits in the calculator to see the share, and the share if deposits fall 30%.
What happens if my deposits drop and I can't cover the debit?
Missed or bounced debits can put you in default under many agreements, so do not wait. Read your contract for a reconciliation clause, which some funders use to adjust debits to actual receipts, and contact the funder early. Our guide on what to do if you can't pay your MCA walks through the options.
Why is my funder's daily payment different from this calculator?
The calculator spreads the full payback evenly over about 22 business days a month. Funders may count days differently, use a percentage of daily receipts, or add fees. Treat the result as an estimate and compare it with the figures on your term sheet.
Can I use this if I already have an MCA?
This page is built for an offer you have not signed yet. If you already have one or more advances, the MCA early payoff calculator and the MCA consolidation calculator are better fits.
Which MCA calculator do you need?
- This page — cost of an offer you haven't signed yet (factor rate, fees, effective APR)
- What an MCA really costs — worked dollar examples and a plain-English explanation, no inputs needed
- MCA early payoff calculator — you already have an advance and want to pay it off early
- MCA consolidation calculator — you carry two or more advances and need daily-debit relief