Merchant Cash Advance APR Calculator
Merchant Cash Advance (MCA) factor rate of 1.4x sounds reasonable — but with daily repayment over 9 months, the true APR is often 80–150%. Calculate the APR equivalent before signing.
| Advance amount | — |
| Factor rate | — |
| Total payback | — |
| Cost (payback – advance) | — |
| Days to repay | — |
| True annualized APR | — |
Merchant Cash Advances (MCA) are technically not loans — they're a sale of future credit card receivables. Pricing is expressed as a 'factor rate' (1.2–1.5x) rather than an interest rate, which obscures the true cost. Once converted to APR, MCAs typically run 60–150%+ — comparable to predatory payday lending.
How an MCA Works
You receive a lump sum (e.g., $50,000). You agree to repay a larger sum (e.g., $70,000, a 1.4× factor) by surrendering a fixed percentage of your daily credit-card sales (typically 5–15%) until repaid. Repayment time depends on sales volume — typically 4–12 months.
True APR Math
A 1.4× factor on $50,000 = $20,000 cost. If repaid over 8 months, annualized APR ≈ 60%. Over 6 months, ≈ 80%. Over 4 months (very fast repayment), 120%+. MCAs are NOT regulated like loans — TILA APR disclosure does not apply. You must compute APR yourself.
When to Avoid
Never use multiple stacked MCAs — daily repayments compound and can take 30–50% of daily sales. Avoid when SBA 7(a), business LOC, or even high-rate online term loans are available. MCA reps are commission-driven; expect aggressive sales tactics. If a broker calls daily, the rate is bad.
Last updated May 2026. Sources: CFPB Small Business Lending, FTC Small Business Lending.