{
  "id": "mca",
  "version": "a982db6834f5",
  "status": "published",
  "name": "Merchant Cash Advance Calculator",
  "question": "What does an MCA really cost?",
  "summary": "Computes the payback amount, the dollar cost, the number of payments, the term and an estimated APR of a merchant cash advance from the advance, the factor rate, the fee and the daily, business-day or weekly remittance.",
  "category": "finance",
  "subcategory": "loans",
  "url": "https://www.acalculator.org/finance/mca-calculator",
  "markdown": "https://www.acalculator.org/finance/mca-calculator.md",
  "kind": "function",
  "method": "payback = advance × factor rate; payment = fixed amount, or monthly sales × holdback × 12 ÷ payments a year; payments = ⌈payback ÷ payment⌉; APR = r × payments a year, where r makes the present value of the payments equal the amount received.",
  "assumptions": [
    "The payback amount and a holdback payment are rounded half up to the cent; every other step is exact until the display.",
    "Payments are equal and start one payment period after funding; the last payment is whatever is left.",
    "Business days are taken as 260 equal periods a year (5 a week), every day as 365, and weekly as 52.",
    "Sales are steady, so a holdback payment stays the same; real remittances rise and fall with sales, which changes the term and the APR.",
    "Fees deducted from the advance are part of the cost, as in the California finance charge rule (10 CCR § 943)."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "advance": {
        "title": "Advance amount",
        "description": "The amount the funder advances before any fee is taken out.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1,
        "maximum": 100000000
      },
      "factor": {
        "title": "Factor rate",
        "description": "The number the advance is multiplied by to get the payback amount, such as 1.35.",
        "type": "number",
        "minimum": 1,
        "maximum": 3
      },
      "fee": {
        "title": "Fees taken from the advance (optional)",
        "description": "Origination or other fees deducted from the advance, so you receive less.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 100000000
      },
      "every": {
        "title": "Payments",
        "description": "How often the funder takes a payment: every day, every business day, or every week.",
        "type": "string",
        "enum": [
          "business",
          "daily",
          "weekly"
        ]
      },
      "by": {
        "title": "Payment set by",
        "description": "A fixed payment amount, or a holdback percent of your sales.",
        "type": "string",
        "enum": [
          "holdback",
          "amount"
        ]
      },
      "holdback": {
        "title": "Holdback",
        "description": "The share of your sales the funder takes from each payment period.",
        "type": "number",
        "x-unit": "percent",
        "exclusiveMinimum": 0,
        "maximum": 100
      },
      "sales": {
        "title": "Sales per month",
        "description": "Your average card or bank sales a month, the base of the holdback.",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 1000000000
      },
      "payment": {
        "title": "Payment amount",
        "description": "The fixed amount taken each payment.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0.01,
        "maximum": 100000000
      }
    }
  },
  "outputs": {
    "apr": {
      "label": "Estimated APR",
      "description": "The yearly rate that discounts the payments back to the amount received, by the actuarial method: the rate per payment period × payments a year.",
      "format": "percent"
    },
    "payback": {
      "label": "Payback amount",
      "description": "Advance × factor rate, rounded half up to the cent.",
      "format": "money"
    },
    "cost": {
      "label": "Total cost of financing",
      "description": "Payback amount − advance + fees: the dollars the advance costs.",
      "format": "money"
    },
    "received": {
      "label": "Amount you receive",
      "description": "The advance minus the fees.",
      "format": "money"
    },
    "each": {
      "label": "Payment",
      "description": "The amount taken each payment.",
      "format": "money"
    },
    "count": {
      "label": "Number of payments",
      "description": "Payback amount ÷ payment, rounded up; the last payment is what is left.",
      "format": "integer"
    },
    "last": {
      "label": "Last payment",
      "description": "The payback amount minus all the full payments.",
      "format": "money"
    },
    "days": {
      "label": "Estimated term in days",
      "description": "Calendar days to the last payment: payments × 365 ÷ payments a year, rounded up.",
      "format": "integer"
    },
    "perDollar": {
      "label": "Cost per dollar received",
      "description": "The total cost divided by the amount received.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "advance": 50000,
      "factor": 1.35,
      "fee": 1000,
      "every": "business",
      "by": "holdback",
      "holdback": 10,
      "sales": 52000,
      "payment": 400
    },
    "outputs": {
      "apr": 62.58286183754754,
      "payback": 67500,
      "cost": 18500,
      "received": 49000,
      "each": 240,
      "count": 282,
      "last": 60,
      "days": 396,
      "perDollar": 0.37755102040816324
    },
    "text": "Paying back $67,500.00 on $50,000.00 costs $18,500.00, an estimated APR of 62.58%."
  },
  "examples": [
    {
      "given": {
        "advance": 50000,
        "factor": 1.35,
        "fee": 1000,
        "every": "business",
        "by": "holdback",
        "holdback": 10,
        "sales": 52000
      },
      "expect": {
        "payback": 67500,
        "cost": 18500,
        "received": 49000,
        "each": 240,
        "count": 282,
        "last": 60,
        "days": 396,
        "apr": 62.58286183754351,
        "perDollar": 0.37755102040816324
      },
      "source": "California Code of Regulations, Title 10, § 940, Calculation of Annual Percentage Rate (actuarial method of Appendix J, 12 CFR Part 1026), https://www.law.cornell.edu/regulations/california/10-CCR-940, retrieved 2026-10-01; hand calculation in content.mdx; Python 3 bisection on the present value",
      "tolerance": 1e-9
    },
    {
      "given": {
        "advance": 20000,
        "factor": 1.2,
        "every": "weekly",
        "by": "amount",
        "payment": 1000
      },
      "expect": {
        "payback": 24000,
        "cost": 4000,
        "count": 24,
        "last": 1000,
        "days": 169,
        "apr": 78.68038829201157
      },
      "source": "California Code of Regulations, Title 10, § 914, Sales-Based Financing Disclosure (finance charge, estimated total payment amount, estimated term), https://www.law.cornell.edu/regulations/california/10-CCR-914, retrieved 2026-10-01; Regulation Z, Appendix J, 12 CFR Part 1026 (https://www.consumerfinance.gov/rules-policy/regulations/1026/j/); hand calculation in content.mdx: 20,000 × 1.2 = 24,000; 24,000 ÷ 1,000 = 24 payments",
      "tolerance": 1e-9
    },
    {
      "given": {
        "advance": 10000,
        "factor": 1,
        "every": "daily",
        "by": "amount",
        "payment": 300
      },
      "expect": {
        "apr": 0,
        "cost": 0,
        "count": 34,
        "last": 100
      },
      "source": "Regulation Z, Appendix J, 12 CFR Part 1026 (https://www.consumerfinance.gov/rules-policy/regulations/1026/j/): no finance charge gives a 0% rate; hand calculation in content.mdx: 10,000 ÷ 300 = 33.3, so 34 payments, the last $100"
    }
  ],
  "sources": [
    "Regulation Z, Appendix J to Part 1026, Annual Percentage Rate Computations for Closed-End Credit Transactions (actuarial method; APR = unit-period rate × unit periods in a year), Consumer Financial Protection Bureau, retrieved 2026-10-01. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/",
    "California Code of Regulations, Title 10, § 940, Calculation of Annual Percentage Rate (commercial financing), retrieved 2026-10-01. https://www.law.cornell.edu/regulations/california/10-CCR-940",
    "California Code of Regulations, Title 10, § 914, Sales-Based Financing Disclosure Formatting and Contents (funding provided, finance charge, estimated APR, estimated term), retrieved 2026-10-01. https://www.law.cornell.edu/regulations/california/10-CCR-914"
  ],
  "related": [
    "business-loan",
    "sba-loan",
    "apr",
    "loan"
  ],
  "changelog": []
}