Merchant Cash Advance Calculator — Factor Rate to APR

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Turn an MCA factor rate into total payback, term and the estimated APR that California and New York require funders to disclose, with daily or weekly debits and early payoff.

By Konstantin Iakovlev · Updated September 2026 · Source: Regulation Z Appendix J; California 10 CCR §§ 940-946; New York 23 NYCRR Part 600

$
$
Payments
Payment amount
$

Estimated APR

122.36%

Total payback

$67,500

Cost of the advance

$19,000

What the advance costs

Payback: $50,000 × 1.35$67,500.00
Cash you actually receive$48,500.00
Finance charge (payback + fees − cash received)$19,000.00
Cost per dollar received$0.39
Daily payment$450.00
Number of payments150
Estimated term210 days (about 6.9 months)
Average monthly cost$9,771.43
Estimated APR (Reg Z Appendix J)122.36%

A factor rate is not an interest rate. Because the payback is fixed and you repay it in months, the annual cost is far higher: the shorter the term, the higher the APR, and paying early without a discount raises it further.

California and New York require funders to disclose this estimated APR on offers to small businesses (up to $500,000 in California, $2.5 million in New York). Utah, Virginia, Georgia, Florida, Connecticut, Kansas, Missouri, Texas and Louisiana require cost disclosures without an APR.

Assumes funding on a Monday and debits every business day without holidays, as the California and New York rules allow; with holdback payments the term is an estimate from your average sales.

Use the Merchant Cash Advance Calculator — Factor Rate to APR above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

A merchant cash advance is not a loan: a funder buys a slice of your future sales at a discount. You receive the advance, usually minus fees, and repay a fixed amount equal to the advance times the factor rate, by daily or weekly debits or a percentage of card sales. A 1.35 factor on $50,000 means $67,500 back no matter how quickly you repay it.

Because the payback is fixed and paid over a few months, the real annual cost is much higher than the factor suggests. The calculator works out the estimated APR the way California and New York require funders to disclose it on offers to small businesses: the Truth in Lending actuarial method of Regulation Z Appendix J, applied to the cash you actually receive and each scheduled payment. Nine more states require cost disclosures without an APR.

Paying an advance off early usually saves nothing, since the payback is fixed; it only raises the APR, unless the contract gives an early-payoff discount on the unearned fee. For a holdback advance the term depends on your sales, so the calculator estimates it from your average monthly sales through the account.

Example: $50,000 at a 1.35 Factor

  1. 1 Input: a $50,000 advance at a 1.35 factor, with $1,500 of fees taken out of the funding and $450 debited every business day.
  2. 2 Payback: $50,000 × 1.35 = $67,500, repaid in 150 daily payments over 210 days.
  3. 3 Cost: $67,500 − $48,500 of cash received = $19,000, or 39 cents per dollar received.
  4. 4 Result: the estimated APR is 122.36%. Paid off after 60 payments with no discount, it rises to 184.96%.

Source: Regulation Z Appendix J; California 10 CCR §§ 940-946; New York 23 NYCRR Part 600 · Last updated: September 2026

Frequently Asked Questions

How do I convert a factor rate to an APR?
Multiply the advance by the factor rate to get the payback, subtract the cash you actually receive to get the cost, then find the annual rate that makes your scheduled payments worth the cash received. A 1.35 factor repaid daily over about seven months works out to an APR above 100%.
Is a merchant cash advance a loan?
Legally it is usually a purchase of future receivables, not a loan, so state usury limits and the federal Truth in Lending Act generally do not apply. California and New York still require funders to disclose an estimated APR to small businesses.
Does paying off an MCA early save money?
Usually not. The payback is fixed when you sign, so paying early only shortens the term and raises the APR, unless the contract gives a discount on the unearned part of the fee.
What is a typical MCA factor rate?
Factor rates commonly run from about 1.1 to 1.5, and the business often has fees taken out of the funding as well. The shorter the repayment period, the higher the effective annual cost for the same factor.

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