Full Breakdown
| Item | Amount |
|---|---|
| Advance received | - |
| Total repayment (advance × factor rate) | - |
| Total MCA cost | - |
| Est. daily payment (term × 22 business days) | - |
| Break-even monthly revenue increase needed | - |
| Your expected monthly revenue increase | - |
| Expected profit from increase (at stated margin) | - |
| Total additional profit over term | - |
| Net gain / (loss) after MCA cost | - |
| ROI on advance | - |
How to Use the MCA ROI Calculator
This calculator helps you answer a single critical question before accepting an MCA offer: will the capital I receive generate more value than it costs?
- Advance Amount: Enter the amount you want to borrow.
- Factor Rate: Enter the factor rate from your offer (typically 1.15-1.45). If you don't have an offer yet, use 1.25-1.30 as a planning estimate.
- Term: Enter the estimated repayment period in months.
- Current Monthly Revenue: Your average monthly revenue before the advance.
- Expected Monthly Revenue Increase: How much additional revenue you expect the advance to generate each month. Be conservative; underestimate rather than overestimate.
- Profit Margin: Your approximate net profit margin (%). The calculator uses this to convert additional revenue into additional profit.
The calculator shows whether your expected revenue growth exceeds the MCA cost, and by how much. A positive ROI means the advance is financially justified. A negative ROI means you'll pay more in MCA costs than the advance generates in profit.
How the Default Example Adds Up
How This Calculator's ROI Verdict Tiers Work
Example Scenarios
$30K advance at 1.28x over 5 months. New commercial oven generates $6K/month in additional revenue at 25% margin.
$60K advance at 1.25x over 8 months. Second van generates $8K/month in additional revenue at 35% margin.
$40K advance at 1.30x over 3 months. Holiday inventory generates $20K/month in additional revenue at 40% margin.
$25K advance at 1.35x over 5 months. No additional revenue expected, paying off credit card.
$75K advance at 1.27x over 6 months. Materials and crew enabling $25K/month in additional jobs at 30% margin.
$20K advance at 1.32x over 4 months. Covering payroll gap, no additional revenue expected.
When MCA ROI Is Typically Positive
- Revenue-generating investment: Equipment, inventory, or staff that directly increase sales
- Known demand: Active contracts, confirmed orders, proven seasonal surge
- Short payoff timeline: Revenue impact occurs within the advance term
- High-margin revenue increase: At 40%+ margin, the break-even revenue increase is lower
- Avoiding a larger cost: Preventing contract loss, facility closure, or supplier cutoff
When MCA ROI Is Typically Negative
- Debt payoff with no revenue plan: Replaces one obligation with a higher-cost one
- Covering ongoing losses: Adds cash without addressing the reason revenue is below expenses
- Speculative revenue: Revenue increase that depends on uncertain future events
- Long-term capital need: Funding a 3-year asset with a 6-month advance creates payment strain
- Stacking on top of maxed obligations: Combined holdback exceeds what cash flow can sustain
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Check My Eligibility →Frequently Asked Questions
How do I calculate MCA ROI?
MCA ROI = (Net Revenue Gain − MCA Cost) ÷ Advance Amount × 100. Net Revenue Gain = expected monthly revenue increase × advance term × profit margin. MCA Cost = advance amount × (factor rate − 1). Example: $50,000 advance, 1.30 factor rate, 6-month term, $5,000/month expected revenue increase at 30% margin. MCA Cost = $15,000. Revenue gain = $5,000 × 6 × 30% = $9,000. Net gain = −$6,000. ROI = −12%. In this scenario, the advance is not financially justified unless non-financial benefits (customer retention, contract fulfillment) offset the cost.
What is the break-even revenue increase for an MCA?
Break-even monthly gross revenue increase = MCA cost ÷ profit margin ÷ term. Example: $50,000 advance at 1.25x costs $12,500. Over 6 months at 25% margin: $12,500 ÷ 25% ÷ 6 = $8,333/month in additional gross revenue to break even. If you can realistically generate more than $8,333/month in new revenue using the advance, the advance breaks even or better.
What is a good ROI for an MCA?
A positive ROI (above 0%) means the advance generated more value than it cost. A strong ROI for MCA use cases is typically 50%+ over the advance term, which means the revenue or profit generated exceeds the advance cost by at least 50%. Because MCA costs are higher than bank financing, the revenue impact must be correspondingly higher to justify the cost.
Should I use an MCA to pay existing debt?
Generally no. Using MCA to pay existing debt replaces one obligation with a higher-cost one and produces zero new revenue. The only exception is debt consolidation where the new MCA payment (as a % of revenue) is genuinely lower than multiple combined obligations; this requires careful calculation before proceeding. See the MCA ROI calculator: if "expected revenue increase" is $0, the ROI will always be negative regardless of advance amount.
Is an MCA ever worth it for a business in financial trouble?
Sometimes: if the advance prevents a larger financial loss. Examples: an MCA to make payroll for two weeks while waiting on a large invoice to clear may be worth the cost if the alternative is losing your team. An MCA to avoid defaulting on a lease may be worth it if lease default terminates your operating agreement. The key question is: what is the cost of NOT getting the advance? If that cost exceeds the MCA cost, the advance is financially rational even with a negative ROI on paper.
Can I refinance an MCA to improve ROI?
In most cases, MCA refinancing replaces an existing advance with a new one to get a lump sum for cash flow or a lower daily payment. It typically does not reduce total cost; it resets the clock and often adds cost. The correct financial analysis: compare the remaining cost of the current advance vs. the total cost of a refinance. Refinancing is justified when daily payment reduction outweighs the additional total cost.
Should I use an MCA to fund marketing?
Only if you have documented customer acquisition cost (CAC) and lifetime value (LTV). If you know that $1,000 in ad spend generates $4,000 in lifetime revenue at 30% margin ($1,200 gross profit), the ROI is clear. If you're guessing at returns from a new marketing channel, the revenue increase is speculative and the ROI calculation will be unreliable. Use the calculator with your realistic CAC-to-revenue ratio, not your optimistic projection.
When does an MCA make financial sense?
An MCA makes financial sense when the incremental revenue or profit it enables exceeds the total cost of capital. Common ROI-positive use cases: (1) inventory purchase to fulfill a confirmed large order; (2) equipment that directly generates billable work; (3) hiring staff for a new contract; (4) marketing with a known customer acquisition cost and lifetime value; (5) bridging a cash flow gap to avoid losing a contract. An MCA does NOT make financial sense for paying existing debt or covering losses with no revenue-generating plan.