A merchant cash advance costs advance amount times factor rate: a $50,000 advance at a 1.30 factor rate means $65,000 in total payback, a $15,000 cost of capital. Run your own numbers below and see how the holdback shapes the remittance timeline. An advance is a purchase of future receivables, not a loan, so the math works differently from other funding.
Estimate only. A merchant cash advance is a purchase of future receivables, not a loan. Remittances rise and fall with your actual sales, so the timeline is an estimate, not a fixed term. Actual amount funded, factor rate, fees, and total payback depend on the provider and underwriting. Checking your options won't affect your credit score.
How factor-rate pricing works
Multiply the amount funded by the factor rate to get total payback. A 1.30 factor rate on $50,000 means $65,000 remitted in total, whether that takes five months or ten. The factor rate itself never changes with time, but the effective annualized cost rises the faster remittances complete, which is why speed matters when you compare offers.
Total payback = advance amount x factor rate
Cost of capital = total payback minus amount funded
Factor rates commonly run from about 1.10 to 1.50
What the holdback controls
The holdback is the percentage of daily or weekly card sales or deposits remitted toward the payback. Because remittances track sales, there is no fixed term: strong months finish the payback faster, slow months stretch it out. The estimated timeline in this calculator assumes your recent monthly receivables hold steady.
How to compare offers
Providers quote the same advance differently, so put every offer on the same three numbers: amount funded, total payback, and estimated remittance pace. Get every fee in writing, and ask for the state-required cost disclosure where your state mandates one. If your cash flow needs a fixed, predictable payment instead, compare a term product or a line of credit before signing.
Frequently asked questions
Is a factor rate the same as a percentage rate?
No. A factor rate is a fixed multiplier on the amount funded and does not accrue over time. The effective annualized cost depends on how quickly remittances complete, which is why two offers with the same factor rate can cost very differently in practice.
What happens if my sales slow down?
Remittances are tied to your receivables, so they shrink when sales shrink and the timeline extends. Review your agreement's reconciliation provisions, they govern how the remittance adjusts to actual sales.
How is a merchant cash advance different from other funding?
It is structured as a purchase of future receivables, not a loan. That changes the paperwork, the cost math (a factor rate instead of an annualized rate), and how payments flex with your sales.
Important disclosures
This is a purchase of future receivables, not a loan.
Subject to underwriting; not all applicants qualify.
Costs and available structures vary by product, business profile, state, and provider.
Review amount funded, total payback, fees, and all required disclosures before accepting an offer.
Licensing, registration, and commercial financing disclosure requirements vary by state and should be confirmed with counsel before launch.
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