Business Loan & Cash Advance Cost Calculator
What does a merchant cash advance really cost?
Far more than the factor rate suggests, because you repay it within months. The sample advance of $50,000 at a factor rate of 1.35, repaid over 126 business days (about 5.8 months) with $1,500 of fees, costs $19,000 on the $48,500 you actually receive: a true APR of 143.97%. The same amount borrowed for 24 months at 11.00% costs $7,429 — a true APR of 14.08%.
A factor rate of 1.35 sounds like 35%. It is not an interest rate: the 35% is charged on the whole amount even though you pay it back within months, and fees come off the money you receive. This page turns any advance or loan into its payment schedule and finds the one yearly rate that makes those payments worth exactly what you got — the true APR — so different offers can be compared on the same scale.
FailA factor rate of 1.35 over 126 business days (about 5.8 months) costs $19,000 on the $48,500 you receive — a true APR of 143.97%, or $39.18 for every $100.
| True APR | 143.97% | the yearly rate at which your payments are worth exactly what you received |
|---|---|---|
| Effective annual rate | 320.3% | the same rate with compounding over a year |
| Total cost | $19,000 | everything you repay minus the $48,500 you receive |
| Total repaid | $67,500 | over 126 payments |
| Each payment | $535.71 | every business day, 126 payments |
| Cost per 100 received | $39.18 | for every $100 that reaches your account, rounded up |
| Money you actually receive | $48,500 | amount minus $1,500 of fees |
| Offer | Total repaid | Each payment | True APR |
|---|---|---|---|
| Loan 11.00%, 24 months | $55,929 | $2,330.39 a month | 14.08% |
| Advance, factor 1.15 | $57,500 | $456.34 a business day | 71.86% |
| Advance, factor 1.20 | $60,000 | $476.19 a business day | 90.55% |
| Advance, factor 1.30 | $65,000 | $515.87 a business day | 126.57% |
| Advance, factor 1.35 (yours) | $67,500 | $535.71 a business day | 143.97% |
| Advance, factor 1.40 | $70,000 | $555.55 a business day | 161.00% |
| Advance, factor 1.50 | $75,000 | $595.23 a business day | 194.08% |
Runs in your browser with fixed, tested formulas — the same exact arithmetic as the Business X-Ray. Nothing you type is sent or stored.
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This page tests one thing with a few monthly numbers. The Business Decision X-Ray runs your whole business through the same engine, day by day: nine tests, the exact breakpoint, the smallest repair and a dated action plan. Open demo of every section, no sign-up.
How this calculator works
Every offer becomes a list of payments. For an advance, the amount × the factor rate is split evenly over the business days (or weeks) of the term, and the last payment takes any rounding. For a loan, the level monthly payment comes from the standard amortizing formula; each month’s interest is rounded to the cent and the last payment clears the balance.
The true APR is the yearly rate at which those payments, discounted back to today, are worth exactly the money you receive after fees — the internal rate of return of the schedule, times the number of payments in a year (260 business days, 52 weeks or 12 months). It is found to 0.00001% with exact integer arithmetic and shown to 0.01%. The effective annual rate is the same rate compounded over a year.
The label is a simple rule of thumb, not a legal line: Pass up to 36% true APR, Tight from 36% to 100%, Fail above 100%. 36% is the cap US federal law (the Military Lending Act) sets on consumer credit to active-duty service members, and a common reference point for expensive credit; business credit has no such cap.
The formula
Advance: total repaid = amount × factor rate; payment = total ÷ number of payments. Loan: payment = amount × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), r = interest rate ÷ 12.
True APR = i × payments a year, where i solves: amount − fees = Σ paymentₖ ÷ (1 + i)ᵏ. Effective annual rate = (1 + i)^(payments a year) − 1.
Cost per 100 = (total repaid − money received) ÷ money received × 100, rounded up.
Worked example
The sample offer advances $50,000 at a factor rate of 1.35: you repay $67,500 — $535.71 every business day for 126 business days — and $1,500 of fees come off the top, so $48,500 reaches your account. That costs $19,000, or $39.18 for every $100, and the true APR is 143.97%.
Borrowing the same $50,000 with the same fees as a 24-month loan at 11.00% costs $7,429 and has a true APR of 14.08%. The table puts the loan next to advances at factor rates from 1.15 to 1.50 over the same term.
What this calculator does not do
- It assumes every payment is made on schedule, a fixed daily or weekly amount for an advance and level monthly payments for a loan. Balloons, interest-only periods and variable rates are not modelled.
- Business days are counted as 260 a year and 5 a week; holidays are ignored.
- It prices the money only. It does not say whether borrowing is a good idea, check the contract, or replace advice from an accountant or lawyer — it is not personal financial advice.
Questions people ask
Why is the APR so much higher than the factor rate?
Because the factor is charged once on the whole amount, but you have the money for only a few months, and less of it every day as the payments come out. On average you hold only about half of the money, and only for a few months — so the yearly rate is several times the factor percentage.
My advance is repaid as a share of card sales, not a fixed amount. Does this still work?
Only approximately. Enter the term the provider expects, in business days. If your sales are slower, the term stretches and the true APR falls; if faster, it rises. Run the page with a shorter and a longer term to see the range.
Is an APR the right way to compare a cash advance?
Several US states — California and New York among them — now require providers of commercial financing to disclose an estimated APR for exactly this reason: it is the one number that puts a factor rate, a loan and a line of credit on the same scale. It does not tell you whether the money will earn more than it costs; only your own numbers can.
Does it include prepayment discounts or early-payoff rules?
No. It assumes you make every payment on schedule. Some advances offer a discount for early payoff; if yours does, work out the payoff amount with the provider and treat it as a shorter term.
Related decisions
- Cash Runway Calculator — How many months your cash lasts — now, with no sales, and if sales fall.
- 13-Week Cash Flow Calculator — Week-by-week cash for the next 13 weeks, and the first week that breaks.
- Cash Conversion Cycle Calculator — How many days your cash is stuck, and how much money that ties up.
- How to stress test your small business cash flow
Formulas reviewed 26 September 2026
