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Use our (MCA) merchant cash advance calculator to estimate your daily or weekly payments. Input the amount your seeking, desired term length and factor rate to see how your payment changes.
How an MCA Calculator Can Help You
When a business owner applies for a cash advance, sometimes the numbers aren’t always black and white, which can make it difficult to understand. How do you calculate a cash advance payment? What is a credit card cash advance? What does it cost? What is the average interest rate on a cash advance? Can a cash advance hurt your credit? On this page, we’ll answer the financial questions you may have, so you can avoid paying high interest rates or exorbitant fees.
How a Cash Advance Works
A cash advance is a form of short-term debt capital, not to be confused with business loans. You’re borrowing money which typically is sent via ACH or wire to your checking account. The cash advance amount and costs are determined based on your annual revenue, credit score, average daily bank balance, and credit card debt, along with other factors. It’s not your typical annual percentage rate or APR type of loan, instead a cash advance uses a factor rate to calculate the total cost or pay back. It’s technically not a loan, but an advance against your credit cards sales or future revenue. At Upwise, we offer our clients access to quick and affordable financing. On average, our cash advance rates typically come in at a lower interest rate and a term up to 3 months longer in comparison to competitors.
How to Calculate the Cost of Your Cash Advance
- Enter the loan amount you are seeking, factor rate and term in months
- The cash advance calculator will provide your estimated daily or weekly minimum payments
- Keep in mind, the rate, term and cost will be determined by what your business qualifies for
- Estimate your daily payments, based on the cash advance details you’ve entered or were quoted. This number can be a daily or weekly payment frequency.
- Also, your business may qualify for a weekly payment option, if you prefer paying weekly over a daily
- Calculate your estimated total cost or total repayment amount
- This is the total amount you have to repay. This number includes the advance amount plus the interest or fixed factor rate you will pay for the advance. This pay back will be your loan balance, which as you’re paying down the loan, the balance will decrease.
MCA Calculator Help
Many merchants find it difficult to determine if they are getting the best deal on an MCA. This is because of the unusual method of determining a factor rate, percentage of future revenue, and repayment options. If you fall into this category, our cash advance calculator will give you all the information you need to make an educated decision.
This calculator can be used to determine the estimated dollar amount of daily or weekly repayment options. It can also provide information about the total payback, factor rate and term of your cash advance.
Not sure what all these terms mean? Read below for a short explanation on each.
Cash Advance – Calculator Terms
- Amount Seeking: The amount you are seeking or have received from the MCA lender. This number is expressed as a dollar amount.
- Factor Rate: The multiplier used to determine the estimated total payback amount. Use the slider to choose the factor rate you’ve been provided. Similar to interest, but calculated as a fixed fee.
- Term: The term is the period of time in months, you will have to payback the advance. Most cash advances range anywhere from 1 to 18 month period.
- Estimated Daily Payment: This is approximately the amount you’ll have to pay per day, if you choose a daily payment option.
- Estimated Weekly Payment: This is approximately the amount you’ll have to pay per week, if you choose a weekly payment option, instead of a daily.
- Estimated Total Payback: The total payback amount that you will have to repay the MCA company for the advance. This includes the original advance amount you’re seeking and the cash advance fees/factor interest rate you have to pay on top.
How to Apply for a Cash Advance
Apply online in just a few minutes or call us directly to apply over the phone, its your choice and we like to hear from you. Call us today at (646) 837-5522
Our system evaluates your business and typically provides a decision within hours. Approvals for certain products may take up to 24-48 hours.
Sign your contract, submit closing documents and you'll receive the funds into your account via wire transfer or ACH. Available as soon as same day.
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What is a Merchant Cash Advance?
A merchant cash advance or MCA is a sale or purchase of future revenue. In exchange for cash from a merchant cash advance lender, the merchant agrees to sell a portion of their future revenues at a discounted price. For example, a business might sell $60,000 of future revenue for an advance of $50,000.
The MCA company collects their revenue by either deducting a percentage of the business’s daily sales or daily credit card and debit card sales, if it’s a credit card based advance. This percentage will translate to a fixed daily or weekly payment in most cases. However, if it’s a credit card merchant cash advance – what you pay can fluctuate based on the sales each day. Merchant cash advance fees are determined by a number called a factor rate, not your traditional interest rate.
MCA’s are best and most often used for short-term cash flow needs, such as working capital, cash flow, purchasing inventory or getting new equipment. In fact, it is unsecured financing, so you can pretty much use the capital for any business purpose.
Credit Card Cash Advances
Similar to a merchant cash advance, credit card cash advances are how the industry started. A financial institution would analyze your credit card processing statements, looking at each transaction, purchases, ATM deposits and what your monthly cycle looks like. If you’re business is processing $10,000 in credit cards each month, the lender would approve you for close to $10,000 plus fees and interest. This considering, you don’t have much other debt. Some lenders who provide credit card cash advances require you to switch over your credit card processing or set up a lock-box account. A percentage of your credit card and debit card sales or revenue is taken as the cash advance fee. So, if a lender determines a holdback percentage of 15%, your minimum payment on a daily basis would be 15% of that day’s credit card sales. The lender would subtract their fee and the remaining money from your credit cards would be deposited into your account.
Cash Advance Vs Credit Cards
A credit card may have a similar APR or annual percentage rate to a merchant cash advance. Typically if you have good credit, you may be able to find a card issuer who offers 0% intro APR or low credit card interest. Also, if your business is not established enough to qualify for financing, you may also consider a personal loan or a pay day company (just keep in mind, these are usually high interest). Be sure to ask Upwise Capital what the credit card cash advance limit is. Additionally, utilizing a credit card can have it’s benefits. For example, if you want to increase your bad credit score, or earn rewards like cash back or sign up bonus rewards, then a credit card might be a good option for you.
The Best Merchant Cash Advance Rates
to Boost your Success
Compare multiple cash advance offers and rates when you apply with us. It only takes a few minutes to apply, and Upwise will present you with options.
Alternatives to a Credit Card Cash Advance
If you’re an established business with a good credit score, it’s worth investigating other financing products and services. At Upwise, we offer and have access to over 20+ loans for borrowing money to grow your business. Each loan has his advantages and disadvantages, which may have a daily, weekly, bi-weekly or monthly repayment option. Read more below on other financial loans available to small businesses. Please reach out to request an application.
Other Financing Products and Services
Do Cash Advances Hurt Your Credit?
Merchant cash advances (MCA’s) can affect personal or business credit ratings, however in most cases they do not. They may be considered debt to another bank or lender, but typically it is not reported to the business credit bureau. If your debt ratio becomes too high, then you will likely have lower FICO scores. If you pay your loans back making a minimum payment and on-time payments, this will help your chances of getting better financing in the future. If you are using a traditional bank, a credit card cash advance may show up on your credit report. Additionally, if you fail to repay the money borrowed and default on your cash advance – the lender may report this to your credit bureau.
What is the Cash Advance Fee?
Merchant cash advance transactions in credit cards are often above average interest rates . There might be a high interest rate for such a transaction. You should know the fees you will have to pay relating to cash advances. Typically, the cost is around 2-5% of the total transaction, which is considered administrative fees. This fee may include origination for the loan, underwriting fees, broker fees – which are usually factored into the payback amount. It’s important to consider these fees when calculating your total cost for the loan.
Cash Advance Tips
The True Rate of Borrowing
The effective APR (annual percentage rate) tells you what your monthly rate of borrowing would be if the loan carried interest. However, a cash advance is always presented as a factor rate, instead of traditional APR. The financial costs of an MCA are described with a factor rate number such as 1.25 as opposed to an fixed APR percentage. To understand the total cost of borrowing, you must consider the following factors: total amount borrowed, monthly repayment costs, and paying loan fees.
What Does Cash Advance APR Mean?
The cash advance APR is the annual percentage rate of interest you will have to pay. Some traditional banks use an APR interest rate to calculate credit card cash advances. Banks will receive a percentage from the merchant when you buy something using your credit or debit card for the advance. The interest rates are higher to help make up the difference in bank profits. In addition, banks or cash advance companies consider cash advances as high risk, or that your business may be in financial trouble. Don’t forget, the bank will usually charge a cash advance fee in addition to interest on the money you are approved for, but the fee isn’t included in the APR. At certain federal credit unions or bank institutions you can get a cash advance from your debit card right at the ATM. See above section to read more about cash advance fees.