Merchant Cash Advances (MCAs) have become a popular funding option for businesses seeking fast access to capital without the complexities of traditional loans. Whether you’re a small business owner or financial advisor, knowing how to calculate the cost and repayment terms of an MCA is crucial. That’s where our MCA Stand Alone Calculator comes in—providing a streamlined solution to estimate repayment, factor rates, and eligibility instantly.
What Is a Merchant Cash Advance (MCA)?
A Merchant Cash Advance is not a loan in the traditional sense. Instead, it's an advance based on your business's future credit card sales or daily revenue. Lenders provide you with a lump sum upfront, and you repay it with a percentage of daily credit card sales or ACH debits.
MCA agreements typically include a factor rate instead of an interest rate, which determines how much you'll repay in total.
What Is the MCA Stand Alone Calculator?
The MCA Stand Alone Calculator is a tool designed to help you compute the total repayment amount, the cost of the advance, daily repayment amount, and estimated term, all based on inputs like:
- Advance Amount
- Factor Rate
- Holdback Percentage (for split repayment MCAs)
- Estimated Monthly Revenue
- Estimated Daily Sales (for daily repayment MCAs)
This calculator is standalone—it works independently without needing any integrations or external databases, making it a reliable and secure choice for quick estimations.
How to Use the MCA Stand Alone Calculator
Using the calculator is easy and only requires a few steps:
- Enter the Advance Amount
This is the total amount of money you’re being offered upfront by the lender. - Input the Factor Rate
Factor rates usually range between 1.1 to 1.5. A factor rate of 1.3 on a $10,000 advance means you’ll repay $13,000. - Input Monthly Revenue (optional)
This helps estimate how long it will take to repay the advance. - Input the Holdback Percentage (optional)
This is the percentage of your daily or monthly sales retained by the lender until the advance is fully repaid. - View Results
The calculator will show:- Total Repayment Amount
- Cost of the Advance
- Estimated Daily/Monthly Repayment
- Estimated Repayment Term
Key Formulas Used
Here are the plain text formulas the calculator uses to compute MCA values:
- Total Repayment Amount
Total Repayment = Advance Amount × Factor Rate - Cost of the Advance
Cost = Total Repayment – Advance Amount - Daily Payment Estimate
Daily Payment = (Monthly Revenue × Holdback %) / Business Days in a Month - Estimated Repayment Duration (Days)
Days = Total Repayment / Daily Payment
These estimates help you determine if the offer is manageable for your business cash flow.
Example Calculation
Let’s say your business is offered a $20,000 advance with a factor rate of 1.35 and you make $25,000 in monthly revenue. The holdback percentage is 10%.
- Total Repayment = $20,000 × 1.35 = $27,000
- Cost of Advance = $27,000 – $20,000 = $7,000
- Daily Payment = ($25,000 × 10%) / 22 business days = $113.64/day
- Repayment Duration = $27,000 / $113.64 ≈ 237.6 days (~8 months)
Why Use a Standalone Calculator?
Here are a few key benefits of using a standalone MCA calculator:
- No need for API integrations or external tools
- Fast and secure computations
- User-friendly for non-tech-savvy business owners
- Accurate estimation of total repayment and impact on cash flow
- Helps in comparing different MCA offers
MCA Repayment vs Traditional Loans
Unlike term loans with fixed monthly payments and interest rates, MCAs use a percentage of your revenue for repayment. That makes them flexible but potentially more expensive. A proper MCA calculator can help you see the full financial picture before accepting any offer.
Tips for Choosing the Right MCA
- Compare offers based on factor rate and total repayment, not just advance size.
- Avoid high holdback percentages that hurt daily operations.
- Ensure repayment terms align with your sales volume.
- Always read the fine print for additional fees or terms.
20 Frequently Asked Questions (FAQs)
1. What is a factor rate in an MCA?
A factor rate is a multiplier that determines how much you repay. A 1.3 factor rate means you pay back 1.3× the advance.
2. Is a lower factor rate better?
Yes, lower factor rates reduce your total repayment amount.
3. How is MCA different from a loan?
MCAs are repaid via a portion of daily sales, not fixed monthly payments.
4. Can I use this calculator for weekly or monthly MCAs?
Yes, though it’s ideal for daily repayment plans, you can adjust inputs accordingly.
5. What’s a typical holdback percentage?
Usually between 10% and 20% of daily credit card sales.
6. Is my data stored?
No, this standalone calculator does not store any user input or data.
7. How do I know if I can afford the daily payment?
Compare it to your average daily cash inflow to ensure you maintain liquidity.
8. Does a higher advance always mean better funding?
Not necessarily—evaluate total repayment and term length before deciding.
9. Can I calculate multiple offers at once?
You can enter different inputs multiple times to compare results.
10. What’s a good factor rate?
Anywhere between 1.1 and 1.3 is considered fair; higher than 1.4 may be too costly.
11. What businesses qualify for MCAs?
Usually retail, restaurants, and service-based businesses with steady sales.
12. Are there any hidden fees?
Some MCA providers charge origination or processing fees—read the terms.
13. Can I pay off early?
Some agreements allow early payoff with discounts; others do not.
14. What’s the maximum MCA I can get?
Depends on your monthly revenue—typically 50% to 150% of average monthly sales.
15. Does this calculator work offline?
Yes, since it’s standalone, it can function without internet depending on platform.
16. Can I calculate MCA for multiple locations?
Yes, calculate each location separately or sum their revenues.
17. Are repayments tax-deductible?
Usually, the repayment is not tax-deductible, but the advance fee might be.
18. Can I renew my MCA before full repayment?
Yes, many providers offer renewals once you’ve paid a percentage (e.g., 60%).
19. Do MCAs affect credit score?
Typically not, unless you default and the lender reports it to credit agencies.
20. Is the MCA Stand Alone Calculator free to use?
Yes, it’s completely free and requires no login or personal information.
Final Thoughts
Merchant Cash Advances can be a viable funding option for businesses needing quick cash, but they come with unique repayment structures and costs. The MCA Stand Alone Calculator simplifies the entire decision-making process by offering transparency and clarity on your funding terms.