A discounted payoff target is the amount your existing funder(s) agree to accept to retire a position early, often less than the full remaining balance. A consolidated buyout uses that payoff amount as the principal for one new 1st-position advance, replacing multiple daily debits with a single one. See the full MCA buyout program guide for how payoff letter negotiation actually works.
Enter Your Active Positions
Assumes a 1.20 factor rate over a 190 business-day term for the new consolidated position and 22 business days/month -- representative terms, not a quote. Actual terms depend on underwriting.
Baseline Example: 2 Positions, $50,000 Combined
The default example above, shown as a static table for crawlers and non-JS readers:
| Metric | Before (2 Positions) | After (1 Buyout Position) |
|---|---|---|
| Position 1 remaining balance | $30,000 ($350/day) | Combined balance: $50,000 Net payoff (5% discount): $47,500 |
| Position 2 remaining balance | $20,000 ($220/day) | |
| Combined daily payment | $570/day (~$12,540/mo) | $300.00/day (~$6,600/mo) |
| New advance / factor rate / term | — | $47,500 advance, 1.20 factor, 190 business days |
| New total repayment | — | $57,000.00 ($47,500 × 1.20) |
| Effective APR of new position (IRR method) | — | ~51.3% APR |
*Note: Effective APR is calculated using the Internal Rate of Return (IRR) on the daily payment stream, annualized over 260 business days, for comparative purposes only. 1.20 factor rate and 190 business-day term are representative assumptions, not a quote -- actual terms depend on underwriting and are confirmed via a formal funder payoff letter.
The daily payment drops from $570/day to $300.00/day — $270/day, or roughly $5,940/month, restored to cash flow — because the net payoff amount is financed over a longer term at single-position pricing rather than two overlapping short-term positions.
Payoff Letters & Discount Negotiation
The discount percentage in this calculator is an estimate — the real number comes from a written payoff letter your existing funder(s) provide, confirming the exact balance as of a specific date. Some funders offer a discount for immediate full payoff rather than collecting over the remaining term; this varies by funder and is not guaranteed.
→ For the full negotiation process and what a genuine buyout structure looks like, see the MCA buyout program guide.
Frequently Asked Questions
How is an MCA discounted payoff target calculated?
Sum the remaining balance across all active positions, then apply the payoff discount percentage your existing funder(s) agree to. Discounts are negotiated case by case and are not guaranteed — a 5% discount on a combined $50,000 remaining balance produces a net payoff target of $47,500. Confirm the real figure with a written payoff letter from each funder before relying on any estimate.
How is the new consolidated daily payment calculated?
The net payoff amount becomes the principal of one new 1st-position advance, priced at a factor rate and term reflecting the improved single-position risk profile. Using representative terms (1.20 factor rate, 190 business-day term) on a $47,500 net payoff, the new position totals $57,000 repaid at $300.00/day — versus $570/day combined across the original two positions.
Do I need to qualify again for the new consolidated position?
Yes — a payoff/consolidation is underwritten as a new advance. The same baseline applies: $4,000–$6,000+ in average monthly revenue, at least 6 months in business, and your 6 consecutive months of bank statements. See how MCA underwriting works for the full scoring criteria.
Is this a guaranteed payoff amount or rate?
No. This tool produces an educational estimate using representative terms, not a formal underwriting decision. T.A.G. is a business capital broker connecting applicants to funding partners; actual payoff discounts, factor rate, and term depend on your specific positions, funder payoff letters, and full underwriting review.