Talk to a CFO
Free calculator · 2 minutes

What your merchant cash advance really costs

A factor rate of 1.35 sounds like 35%. Paid back daily over six months, it is often closer to 100% a year. Enter four numbers from your contract and see the real rate, in plain English.

Run my numbers Why factor rates mislead
  • Two minutes, four numbers
  • Free CFO report included
  • Built by fractional CFOs

Your advance

Pull these from your funding agreement. Rough numbers are fine.

The advance amount on the contract, before any fees come out.
$
How much do you pay back in total?
Usually between 1.10 and 1.50. Multiply by the advance to get your payback.
How do they collect?
The fixed amount debited each business day.
$per day
Optional. Lets us show how much of every sale goes to the funder.
$per month
Fees taken off the top
Anything deducted before the money hit your account. These raise your real rate because you pay back the full advance on less cash.
$

Have more than one advance? Run each one separately. Stacked advances compound the cash squeeze, and we can help you see them together.

Your real annual rate (APR)
Most owners are surprised by this number. One short step and it is yours, with a free CFO report.
  • Your real rate and what it meansThe true annual cost, total cost and how much of your sales it takes.
  • How it comparesThe same cash from a bank line, an SBA loan and a credit card.
  • Your refinance savings and break-even dayWhat you would keep with cheaper money, and when the advance starts costing you.
  • A CFO action plan you can save as a PDFFour steps matched to your rate, ready to share with your banker or accountant.
CFO report · Merchant cash advance

Your advance costs 0% a year

If you refinanced today

Replacing this advance with a two-year term loan at about 14%.

$0
less total cost
Monthly payment today
$0
Monthly payment on a term loan
$0
Cash freed up each month
$0

Your break-even day

Your action plan

    The numbers behind this report

    APR here is the annual rate that makes your payment stream equal the cash you received, the same method lenders use for loan disclosures. It is an estimate. Variable "% of sales" payments change with your revenue, so your real term may run longer or shorter.

    Want a second set of eyes? Book a free 30-minute review. We will look at your advances, your cash flow and the options you have, and tell you straight what we would do.

    Book my free review

    Prepared with the SPRCHRGR MCA True Cost Calculator · sprchrgr.com. Educational estimate only, not financial, legal or tax advice.

    Why the contract looks cheaper than it is

    Three things a factor rate leaves out

    Funders quote a factor rate because it is not a loan, so lending disclosure rules often do not apply. That is legal. It also hides the price.

    Time

    A 35% charge over twelve months is one thing. The same 35% squeezed into six months costs about twice as much per year.

    1.35 over 12 months ≈ 63% APR
    1.35 over 6 months ≈ 126% APR

    Daily payments

    You start paying the day after funding. You never have the full amount working for you, yet you pay as if you did.

    On average you hold about half the cash for the whole term.

    Fees off the top

    Origination and broker fees shrink the cash you receive. You still repay the full advance times the factor rate.

    $50,000 advance, $1,500 fees: you get $48,500 and owe $67,500.
    How we help

    An advance is a symptom. We fix the cash problem behind it.

    SPRCHRGR is a team of fractional CFOs and finance engineers for growing companies. When an owner calls us about an advance, this is the work we do.

    01

    See the next 13 weeks

    A week-by-week cash forecast that shows exactly when money comes in, when it goes out, and where the gap is.

    02

    Stop the stacking

    Second and third advances are where most owners get stuck. We map every daily debit and build a plan so you do not need the next one.

    03

    Refinance into cheaper money

    Clean books and a lender-ready package open the door to bank, SBA and asset-based financing. We prepare it and sit at the table with you.

    04

    Fix the cause

    Slow collections, thin margins, inventory tied up on shelves. We find the leak and close it, so cash builds instead of running short.

    Keep reading

    More on merchant cash advances

    Article

    Think Twice Before Taking a Merchant Cash Advance

    The hidden costs behind a merchant cash advance, and the cheaper ways to fund a cash gap.

    Read the article
    (opens in a new tab)
    Questions owners ask

    Straight answers

    Is a merchant cash advance a loan?

    Legally, usually not. The funder buys a share of your future sales at a discount. That is why the contract shows a factor rate instead of an interest rate, and why many loan rules do not apply. To your cash flow it behaves like a very short, very expensive loan, so that is how we price it.

    Why is my APR so much higher than the factor rate?

    The factor rate is a flat charge with no time attached. APR spreads the cost across a year and accounts for the fact that you start repaying immediately. A short term plus daily payments can turn a 1.3 factor rate into an APR of 80% to 150%.

    Can I pay it off early and save money?

    Often not. Many agreements require the full purchased amount no matter when you pay. Some funders offer an early-payoff discount if you ask, so get it in writing. If yours has no discount, a refinance mainly helps by lowering your monthly cash drain, not by cutting what you already owe.

    How accurate is this calculator?

    For fixed daily or weekly payments it is close to what a lender disclosure would show, because it uses the same method lenders use. For "% of sales" agreements the term depends on your future revenue, so treat the result as a good estimate.

    What happens to the numbers I enter?

    Your numbers go to our secure calculator to work out your results, and we keep them with your contact details so a CFO can walk through them with you. We never share them or sell them, and we only use them to help you.

    I have two or three advances. What should I do first?

    Stop and map the cash before taking another one. Add up every daily and weekly debit, compare it with your average daily deposits, and see how many weeks you have. That is the first thing we do on a review call, and it usually shows the way out.

    Get your cash flow back on your side

    Thirty minutes with a CFO, no cost and no pitch deck. Bring your advance agreement and your last three months of bank statements.

    Book my free review Run another advance