Question 1

How do I calculate how much business funding I need?

Accepted Answer

To calculate how much business funding you need, subtract your actual monthly revenue from your fixed monthly costs to find your monthly cash shortfall. Multiply that shortfall by the number of months you need to bridge. Add a 15–20% buffer for unexpected expenses. The result is your recommended funding amount. This calculator does all of that automatically based on your inputs.

Question 2

What is a revenue gap in business?

Accepted Answer

A revenue gap is the difference between the revenue a business expects (or historically generates) and its actual current revenue. When the revenue gap is large enough that actual revenue no longer covers fixed operating costs, a cash shortfall results. Business funding — such as a merchant cash advance — can bridge this shortfall while the business recovers or grows into its revenue potential.

Question 3

How much does a merchant cash advance cost to bridge a revenue gap?

Accepted Answer

The cost depends on the advance amount and factor rate. A $20,000 advance at a 1.25 factor rate costs $5,000 total (the advance × factor rate = total repayment). The daily payment would be approximately $154 on a standard 130-business-day term. Use the Revenue Gap Calculator above to calculate your specific recommended amount and estimated cost based on your actual numbers.

Revenue Gap Calculator

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