How are MCA payments calculated?

MCA payments are based on a holdback percentage of daily revenue. If daily revenue is $5,000 and holdback is 15%, the provider deducts $750 per day. Payments continue until the total repayment (advance times factor rate) is fully collected.

What is a factor rate and how does it work?

A factor rate is a multiplier determining total repayment. A $100,000 advance at 1.30 means you repay $130,000 total. Unlike loan interest, the total cost is fixed regardless of payback speed. Factor rates typically range from 1.10 to 1.50.

What is a typical holdback percentage?

Holdback percentages typically range from 10% to 20% of daily revenue. Lower holdback means smaller payments but longer payback. Higher holdback repays faster but reduces daily cash flow. Providers set holdback based on revenue, advance size, and risk profile.

How does an MCA compare to a business loan?

MCAs are faster but significantly more expensive than traditional loans. A typical MCA at 1.30 factor rate on 6-month payback has an estimated APR of 60%+, while term loans cost 8-20% APR. MCAs also debit revenue daily, while term loans have fixed monthly payments.

Can I pay off an MCA early to save money?

Usually not. Unlike loans where early payoff reduces interest, MCA total repayment is fixed by the factor rate. Paying faster does not change total cost. Some providers offer small early payoff discounts, but it is not standard.

MCA Payback Calculator

Calculate your merchant cash advance payments, payback timeline, and true cost. Enter your advance amount, factor rate, holdback percentage, and daily revenue to see what you will actually pay and how it compares to a traditional loan.

100% FreeNo SignupInstant Results

Calculate your daily or weekly MCA payments, payback timeline, and true cost. See how the holdback percentage affects your cash flow.

Merchant cash advances use a factor rate and holdback on daily revenue instead of a traditional interest rate and fixed payments.

Advance Amount

The total cash advance you receive upfront.

Factor Rate: 1.30(repay $130,000)

1.101.60

Holdback Percentage: 15%

5%30%

The percentage of daily revenue withheld as repayment. Typically 10% to 20%.

Payment Frequency

Average Daily Revenue

Your average daily credit card or total sales. Used to calculate holdback payments.

Typical MCA Cost

This cost is in the typical range for merchant cash advances. Make sure your revenue can comfortably support the daily payments.

~45%

Estimated APR

Daily Payment

$750

15% holdback

Total Repayment

$130,000

$30,000 in costs

Payback Period

8.1 mo

174 payments

Cost Per Dollar

$0.30

for every $1 advanced

Cash Flow Impact

Daily Revenue$5,000

85% kept

15%

Monthly Revenue

$108,350

Monthly Holdback

-$16,253

You Keep

$92,098

Payback Progress

Wk 1

$126,250 left

Wk 4

$115,000 left

Wk 7

20%

$103,750 left

Wk 10

29%

$92,500 left

Wk 13

38%

$81,250 left

Wk 16

46%

$70,000 left

Wk 19

55%

$58,750 left

Wk 22

63%

$47,500 left

Wk 25

72%

$36,250 left

Wk 28

81%

$25,000 left

Wk 31

89%

$13,750 left

Wk 34

98%

$2,500 left

Wk 35

100%

$0 left

MCA vs Term Loan Comparison

This MCA

$130,000

total repayment

$30,000 in costs

Term Loan at 12%

$104,552

total repayment

$4,552 in interest

A term loan at 12% for the same period would save you approximately $25,448.

▶Full Cost Breakdown

Item	Amount
Advance Amount	$100,000
Factor Rate	1.30
Total Repayment	$130,000
Total Cost (fee)	$30,000
Daily Payment	$750
Number of Payments	174
Estimated Payback Period	8.1 months
Estimated APR Equivalent	~45%
Cost Per Dollar Borrowed	$0.30

At $750 per day, make sure this fits your cash flow.

See if you qualify for lower-cost business financing. No impact to your credit score.

Compare Lower-Cost Options Convert Factor Rate to APR

How Merchant Cash Advance Repayment Works

A merchant cash advance is not a loan. It is a purchase of your future receivables. The provider gives you a lump sum, and you repay by having a percentage of your daily revenue (the holdback) automatically debited from your bank account. The total you repay is the advance amount multiplied by the factor rate. A $100,000 advance at a 1.30 factor rate means you repay $130,000, regardless of how long it takes. This calculator shows you the daily payment, timeline, and true cost.

Understanding Factor Rates vs APR

Factor rates look simple: 1.20 means you repay $1.20 for every $1 advanced. But this number hides the true annual cost. A 1.20 factor rate on a 6-month payback works out to roughly 40% APR. The same factor rate on a 12-month payback is closer to 20% APR. The shorter the payback period, the higher the effective APR. Use our factor rate to APR converter for a more precise conversion, or this calculator to see both the factor rate cost and the estimated APR side by side.

The Holdback and Your Cash Flow

The holdback percentage determines how much of your daily revenue goes toward repayment. A 15% holdback on $5,000 daily revenue means $750 per day is withheld. That adds up to roughly $16,250 per month. If your operating expenses are tight, that holdback can create cash flow pressure. Before taking an MCA, make sure your remaining revenue covers rent, payroll, inventory, and other obligations. If not, a line of credit with lower payments might be a better fit.

When an MCA Makes Sense (and When It Does Not)

MCAs work best for businesses that need fast capital, have strong daily sales, and plan to repay quickly. They are commonly used for inventory purchases, emergency repairs, or bridging a short cash gap. They do not make sense for long-term financing, large investments, or businesses with tight margins. If you qualify for a term loan, you will almost always pay less. SBA loans, in particular, offer rates between 6% and 13% for qualified borrowers. Talk to a funding specialist to find out what financing options are available beyond MCAs, with no impact to your credit score.

How It Works

Enter Advance Details

Input your advance amount, factor rate, holdback percentage, and whether payments are daily or weekly.

Add Your Revenue

Enter your average daily revenue so the calculator can determine your actual holdback payment amount.

See the Full Picture

Get your payment amount, payback timeline, estimated APR, cash flow impact, and a comparison to term loan pricing.

What You Get

Daily or Weekly Payment

The exact amount withheld from your revenue each day or week based on your holdback percentage.

Payback Timeline

How many weeks or months until the advance is fully repaid at your current revenue level.

Estimated APR Equivalent

The factor rate converted to an approximate annual percentage rate, so you can compare to traditional loans.

Cash Flow Impact

A visual breakdown of how much revenue goes to the holdback versus what stays in your account.

Term Loan Comparison

Side-by-side view of what the same financing would cost as a traditional term loan at a typical rate.

Payback Progress Chart

A week-by-week visual showing how quickly you pay down the advance balance.

MCA Payback Calculator: Frequently Asked Questions

MCA payments are based on the holdback percentage of your daily revenue. If your daily revenue is $5,000 and the holdback is 15%, the provider deducts $750 per day (or $3,750 per week for weekly remittance). These payments continue until the total repayment amount (advance x factor rate) is fully collected. The payback speed depends on your revenue volume. Higher revenue means faster payback. Use our factor rate to APR converter to see what the factor rate translates to in annual percentage terms.

A factor rate is a multiplier that determines the total amount you repay. If you receive a $100,000 advance with a 1.30 factor rate, you repay $130,000 total, regardless of how long repayment takes. This is different from interest on a term loan, where paying faster reduces total interest. With an MCA, the total cost is fixed from day one. Factor rates typically range from 1.10 to 1.50, with 1.20 to 1.40 being the most common range.

Holdback percentages typically range from 10% to 20% of daily revenue. A lower holdback means smaller daily payments but a longer payback period. A higher holdback repays the advance faster but takes more cash out of your daily operations. MCA providers set the holdback based on your revenue, the advance size, and your risk profile. If you have seasonal revenue swings, some providers adjust the holdback or switch to weekly payments. Make sure the holdback still leaves enough cash to cover working capital needs like payroll and rent.

MCAs are faster to obtain but significantly more expensive. A typical MCA with a 1.30 factor rate on a 6-month payback has an estimated APR of 60% or higher. A term loan for the same amount might cost 8% to 20% APR. MCAs also take money every day from your revenue, while term loans have fixed monthly payments. If you qualify for a traditional loan or line of credit, you will almost always pay less. Check your options to see if lower-cost financing is available.

Usually not. Unlike a traditional loan where early payoff reduces total interest, an MCA has a fixed total repayment amount determined by the factor rate. Paying faster does not change the total cost. Some MCA providers offer a small discount for early payoff, but it is not standard. The only way to reduce MCA costs is to negotiate a lower factor rate before signing, or to qualify for alternative financing with lower total costs. Our loan offer analyzer can help you evaluate MCA terms for red flags.

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