The method
How it is worked out
APR = IRR of (−advance, daily holdback payments until advance × factor is repaid), annualised
- factor rate
- Total repayable ÷ advance
- holdback
- Share of each day's card sales taken
Merchant Cash Advance Calculator
Convert a factor rate and daily card sweep into the true annual rate, and see what the same money costs as a loan. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- Sales dipsSlower sales stretch the term and lower the APR; faster sales raise it.
- RenewalsRenewing before payoff compounds the cost.
- FeesOrigination fees add to the effective rate.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the Merchant Cash Advance Calculator
Convert a factor rate and a daily card-sales holdback into the true annual rate, and see what the same money would cost as a term loan. A 1.3 factor is not 30% a year; it is usually far more.
How it works and an example to tryShow less
How to use the result
Total repayable is the advance times the factor. The daily payment is the holdback share of daily card sales, giving the repayment period. The effective APR is the internal rate of return of those payments. A term loan over the same period is priced for comparison.
Example to try
A £50,000 advance at a 1.3 factor with 15% holdback on £80,000 of monthly card sales repays £65,000 in about five months: £15,000 of cost and an APR well above 100%. A loan over five months at 14% would cost about £1,750.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Restaurants, retailers and salons offered a cash advance, and business owners comparing it with an overdraft, invoice finance or a short-term loan.
Mistakes worth avoiding
- Reading the factor rate as an interest rate.
- Not realising faster sales mean faster repayment and a higher true rate.
- Renewing an advance before it is repaid, which compounds the cost.
Questions
What does the Merchant Cash Advance Calculator do?
Convert a factor rate and daily card sweep into the true annual rate, and see what the same money costs as a loan.
How should I use the result?
Total repayable is the advance times the factor. The daily payment is the holdback share of daily card sales, giving the repayment period. The effective APR is the internal rate of return of those payments. A term loan over the same period is priced for comparison.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a merchant cash advance calculator?
Reading the factor rate as an interest rate. Not realising faster sales mean faster repayment and a higher true rate. Renewing an advance before it is repaid, which compounds the cost.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Results are estimates based on the figures entered, for general information only, and not financial, investment, tax or legal advice. See our terms of use.