What is a factor rate?

A factor rate is a decimal multiplier used to calculate the total repayment on a merchant cash advance. For example, a $50,000 advance at a 1.30 factor rate results in a total repayment of $65,000. Factor rates typically range from 1.10 to 1.50 and are determined by underwriting criteria including revenue consistency, time in business, and industry.

How is the daily payment calculated?

The daily payment on an MCA is calculated by dividing the total repayment amount by the number of business days in the estimated term. For example, $65,000 repayment over 6 months (approximately 130 business days) results in a daily payment of approximately $500.

What factor rate should I expect?

Factor rates typically range from 1.10 to 1.50. Stronger business profiles (high revenue, clean bank statements, preferred industries) typically receive lower factor rates (1.10–1.25). Higher-risk profiles may receive rates of 1.30–1.50. The average for a qualified borrower is typically 1.20–1.35.

MCA Calculator — Merchant Cash Advance Payment & Cost Calculator

Your Advance Details

Advance Amount

$10K$500K

Factor Rate

1.101.50

1.30

Typical range: 1.10 (strongest profiles) to 1.50 (higher risk). Most approved deals: 1.20–1.35.

Estimated Payoff Term

MCA terms are estimates based on revenue. Actual payoff depends on daily sales volume.

Payment Frequency

Payment Summary

Advance Amount $50,000

Factor Rate 1.30

Total Repayment $65,000

Cost of Capital $15,000

Daily Payment $500

Est. Payoff Term ~6 months

Payoff Multiplier 1.30×

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Saved Scenarios

Scenario	Advance	Rate	Total Repay	Cost	Daily Pmt

Up to 3 scenarios can be compared. Click the × to remove a scenario.

Understanding MCA Costs

Factor Rate vs. Interest Rate

A factor rate (1.10–1.50) is NOT an annual interest rate. It is a flat multiplier applied to the advance amount. A 1.30 factor rate means you repay 1.30× the amount you received, regardless of how quickly you pay it off.

Why Daily Payments?

MCA repayment is typically deducted from your business bank account each business day. The small daily amount (rather than one monthly payment) is designed to align with daily business cash flow and reduce the impact on operations.

What Determines Your Factor Rate?

Key factors: revenue consistency, time in business, industry type, existing advance balance, and advance size relative to monthly revenue. Stronger profiles receive lower factor rates.

Typical Factor Rate Ranges

Best profiles (preferred industry, 2+ yrs)1.10–1.20

Strong profiles1.20–1.30

Standard profiles1.30–1.40

Higher-risk profiles1.40–1.50

Calculator FAQ

Unlike traditional loans, most MCAs use a fixed total repayment amount determined by the factor rate. Paying off early may not reduce your total cost unless your agreement includes an early payoff discount. Always confirm the payoff structure with your funder before accepting an offer.
Traditional MCAs with a fixed daily ACH debit continue pulling the same daily amount regardless of revenue. Some funders offer a "flex" or "true split" structure where payments are a percentage of daily deposits — these automatically adjust when revenue drops. This calculator uses the fixed daily payment model, which is most common. Ask your funder which structure applies to your offer.
The effective APR shown is an approximation for comparison purposes. Because an MCA is not a loan, it is not technically subject to APR disclosure requirements. The effective APR shown is calculated by annualizing the total cost over the estimated payoff term. Shorter payoff terms result in higher effective APRs even with the same factor rate, because the cost is compressed into less time.

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