Merchant Cash Advance (MCA) True Cost & APR Calculator for 2026
Calculate the true annualized cost of a merchant cash advance by converting your factor rate and repayment term into an effective APR.
How MCA True Cost Is Calculated
A merchant cash advance charges a fixed factor rate regardless of how fast you repay, so annualizing that cost over your actual repayment term reveals the effective APR — which is often dramatically higher than the factor rate suggests.
Because MCAs are legally structured as a purchase of future receivables rather than a loan, they are generally exempt from state usury laws and interest-rate caps. Effective APRs commonly range from 40% to 350%+ once fees and short repayment terms are factored in, versus roughly 6%–12% for typical bank business loans.
How to Use the MCA True Cost Calculator
Enter the Advance Amount
The amount of cash the MCA provider is offering to advance you.
Enter the Factor Rate
Typically 1.1–1.5. Your total payback equals the advance amount multiplied by this rate.
Enter the Repayment Term
How many days you expect it to take to fully repay the advance based on your daily or weekly debits.
Enter your holdback details
The percentage of daily card sales the provider will collect, and your average monthly card sales, to estimate your daily payment.
Review your true cost
See your total payback, total cost, and the effective APR this advance is equivalent to.
Real-World Scenario Example
"A business takes a $50,000 advance at a 1.35 factor rate, expecting to repay it over 180 days via a 15% daily holdback on $40,000 in average monthly card sales."
Inputs
Result
Total Payback = $67,500, Total Cost = $17,500, Effective APR ≈ 71% — far higher than the 1.35 factor rate alone suggests.
Important Disclaimer
This calculator provides an estimate only. Actual MCA terms, holdback amounts, and effective APR depend on your specific contract and daily card sales fluctuations — review your full agreement before accepting an advance.
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