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.
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.
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.