Finance Calculator
Merchant Cash Advance Calculator
Estimate the total repayment and effective cost of a merchant cash advance. See daily holdback amounts, estimated repayment timeline, and approximate APR.
Enter your MCA details
How is an MCA calculated?
A merchant cash advance uses a factor rate rather than an interest rate. The total repayable is simply the advance amount multiplied by the factor rate. Repayment is collected as a daily percentage of your card revenue.
The formulas used are:
Total Repayable = Advance Amount — Factor Rate
Cost of Advance = Total Repayable - Advance Amount
Daily Holdback = (Monthly Revenue / 30) — Holdback %
Est. Months to Repay = Total Repayable / (Monthly Revenue — Holdback %)
Effective APR — (Cost / Advance) / (Months / 12) — 100
The effective APR is an approximation to help compare MCA costs against traditional loans. Actual repayment speed varies with card revenue fluctuations.
Assumptions and caveats
- •Monthly card revenue is assumed to remain constant. Actual revenue fluctuations will change the repayment timeline.
- •The effective APR is an approximation only and should not be compared directly to regulated loan APRs.
- •Some MCA providers charge additional fees not included in the factor rate.
- •Daily holdback assumes 30 trading days per month for simplicity.
- •Results are indicative estimates only. Contact a provider for a formal offer.
Frequently asked questions
A merchant cash advance (MCA) provides a lump sum of capital to a business in exchange for a percentage of future card sales. It is not technically a loan — it is a purchase of future receivables. Repayment adjusts automatically with your card revenue, making it flexible but often expensive.
A factor rate is a multiplier applied to the advance amount to determine total repayment. For example, a factor rate of 1.30 on a £50,000 advance means you repay £65,000 in total. Factor rates typically range from 1.15 to 1.50.
The holdback is the percentage of daily card revenue that is automatically deducted to repay the advance. For example, a 15% holdback on £500 daily card revenue means £75 per day is withheld. The holdback continues until the total repayable amount is fully repaid.
Technically no. An MCA is structured as a purchase of future card receivables, not a loan. This means MCAs are not regulated in the same way as loans and do not have a fixed repayment schedule — repayment fluctuates with your card sales volume.
Exploring business funding options?
Speak to the Spark team about flexible revenue-based funding and alternatives to merchant cash advances.
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