Merchant cash advances (MCAs) are fast, flexible funding for small businesses, but they are also one of the most expensive forms of financing. This guide answers the question in dollars: what you will actually repay on a $10,000, $25,000, $50,000 or $100,000 advance, and how to check any offer yourself.
All figures below are illustrative. Factor rates are shown as typical market ranges, not quotes from any specific funder. Your offer will depend on your revenue, time in business, credit and industry.
How to Calculate the Cost of a Merchant Cash Advance
You only need four numbers from the offer: the advance amount, the factor rate, the holdback percentage (or fixed daily payment) and any fees.
Step 1: Factor rate → payback and cost. Payback = advance × factor rate. Cost = payback − advance. Example: $50,000 × 1.30 = $65,000 payback, so the cost is $15,000.
Step 2: Holdback → daily payment. With a percentage-of-sales split, daily payment = average daily sales × holdback %. With a fixed daily ACH, the funder sets it as payback ÷ number of business-day payments. A 6-month term is about 126 business days, so $65,000 ÷ 126 = $515.87 per business day.
Step 3: Payoff days. Payoff days = payback ÷ daily payment. If your $515.87 debit runs every business day, you finish in about 126 business days (roughly 6 calendar months). Slower sales under a true holdback mean more days to repay.
Step 4: Effective APR. The quick version is a simple annualized rate: (cost ÷ advance) ÷ (term in days ÷ 365). For $15,000 on $50,000 over 182 days, that is 0.30 ÷ 0.499 ≈ 60%. Because you pay the balance down every day, the amortized APR (the method behind the estimated-APR disclosures California and New York require) is higher, about 109% for this example.
Skip the arithmetic with our merchant cash advance calculator, which converts any factor rate, term and fee into total payback, daily payment and APR.
MCA Cost by Amount: $10K, $25K, $50K and $100K
Payback, cost and daily payment at three typical factor rates, assuming a 6-month term of 126 business-day payments and no extra fees:
| Advance | Factor rate | Payback | Cost | Daily payment (6 mo) |
|---|---|---|---|---|
| $10,000 | 1.15 | $11,500 | $1,500 | $91.27 |
| $10,000 | 1.30 | $13,000 | $3,000 | $103.17 |
| $10,000 | 1.45 | $14,500 | $4,500 | $115.08 |
| $25,000 | 1.15 | $28,750 | $3,750 | $228.17 |
| $25,000 | 1.30 | $32,500 | $7,500 | $257.94 |
| $25,000 | 1.45 | $36,250 | $11,250 | $287.70 |
| $50,000 | 1.15 | $57,500 | $7,500 | $456.35 |
| $50,000 | 1.30 | $65,000 | $15,000 | $515.87 |
| $50,000 | 1.45 | $72,500 | $22,500 | $575.40 |
| $100,000 | 1.15 | $115,000 | $15,000 | $912.70 |
| $100,000 | 1.30 | $130,000 | $30,000 | $1,031.75 |
| $100,000 | 1.45 | $145,000 | $45,000 | $1,150.79 |
Over the same 6-month term, the rate is the same at every advance size:
| Factor rate | Simple annualized rate | Amortized APR (approx.) |
|---|---|---|
| 1.15 | ~30% | ~57% |
| 1.30 | ~60% | ~109% |
| 1.45 | ~90% | ~158% |
Shorter terms raise the APR even though the dollar cost stays the same. That is why you should compare offers in dollars and APR. For more on how factor rates are set, see our guide to MCA factor rates.
How Much Does a $100,000 Merchant Cash Advance Cost?
Here is a full worked example of a $100,000 advance at a mid-market 1.30 factor rate over about 6 months:
- Advance: $100,000
- Factor rate: 1.30 → payback $130,000
- Factor cost: $30,000
- Origination fee (3%, deducted at funding): $3,000, so $97,000 actually lands in your account
- All-in cost: $33,000 ($30,000 + $3,000)
- Daily payment: $130,000 ÷ 126 business days = $1,031.75
- Revenue it implies: at a 15% holdback, $1,031.75 a day corresponds to about $6,878 in daily receipts (roughly $144,000 a month), which is the scale of business funders usually expect for a $100K advance
What that costs as an APR: measured against the $97,000 you actually receive, the simple annualized rate is about 68% and the amortized APR is about 123%. The origination fee alone adds roughly 14 points of amortized APR, because you pay the factor on $100,000 but only receive $97,000.
With an early-payoff discount: suppose that after 63 payments (about 3 months, $65,000 paid) the funder offers to waive half of the remaining $15,000 fee. You pay off the remaining balance with $57,500 instead of $65,000. Your total repaid falls to $122,500 and your all-in cost falls from $33,000 to $25,500, a $7,500 saving. The APR actually rises (to about 130%) because the term is shorter, but you keep more dollars. Not every contract offers this, so get the discount schedule in writing.
At other factor rates: the same $100,000 costs $15,000 at a 1.15 factor or $45,000 at 1.45, before fees. Each 0.05 change in factor rate moves the cost by $5,000.
What Additional Fees Come with an MCA?
Factor cost is the biggest number, but ask for a complete fee schedule before you sign:
- Origination fees: often 1–5% of the advance, usually deducted from the funded amount (see the $100K example above).
- Underwriting or admin fees: flat fees, often $100–$500.
- ACH return fees: $25–$50 per failed debit, plus any fees from your own bank.
- Renewal fees: some funders charge when you renew or refinance before fully repaying.
- Legal or documentation fees: less common, but ask about them.
A legitimate funder deducts fees at funding. Any provider asking you to wire an upfront payment before funding is a red flag.
What Stacking Does to Your Cost
Stacking means taking a second (or third) MCA while the first is still being repaid. Each advance has its own factor cost and its own daily debit, and later positions usually price higher because they are riskier. Two $50,000 advances at 1.30 and 1.40 cost $15,000 + $20,000 = $35,000. That is more than a single $100,000 advance at 1.30, and two daily debits come out of the same sales. If you are already stacked, read our guide to MCA debt consolidation before adding another position.
Payback vs. Reconciliation
The payback amount is fixed, but in a true sales-based MCA the daily debit is supposed to follow your sales. Many agreements include a reconciliation clause that lets you ask for your payments to be adjusted when receipts drop. Terms vary a lot by contract, so check whether yours has one before relying on it. For a full walkthrough, see how MCA repayment works.
How Do MCA Costs Compare to Other Financing?
| Financing Type | Typical APR/Factor | Payments | Speed to Funding | Min. Credit Score |
|---|---|---|---|---|
| Merchant Cash Advance | 40%–350%+ APR (1.09–1.50+ Factor) | Daily/Weekly (Sales-Based) | 24 hrs – 3 days | 500+ |
| SBA loans | 6%–13% APR | Monthly (Fixed) | 1–3 months | 680+ |
| Term Loans (Online) | 8%–30% APR | Daily/Weekly/Monthly (Fixed) | 1–5 days | 550+ |
| Business line of credit | 10%–25% APR | Monthly (Interest-Only on Draw) | 1–4 weeks | 600+ |
| Invoice Factoring | 13%–60% APR | Per Invoice | 3–7 days | No minimum (invoice-focused) |
MCAs cost more than most alternatives on an APR basis. You are paying for speed, looser qualification and repayment that can flex with sales. You can compare MCA providers side-by-side or browse the MCA provider directory.
When Is the Cost Worth It?
An MCA can make sense when:
- Speed is critical: an emergency repair, an urgent inventory buy or a time-sensitive opportunity.
- Cheaper financing is out of reach: your credit or time in business rules out bank and SBA loans.
- Revenue is seasonal: you need payments that move with daily sales.
- The return is clear: the money goes into something that earns more than the cost in the table above.
MCA Cost Red Flags
- Vague pricing: if a provider won’t state the factor rate, payback and every fee in writing, walk away.
- Upfront fees before funding: legitimate fees come out of the advance, not your bank account in advance.
- Confession of judgment (COJ): some agreements include one, and it lets the funder get a judgment without a trial. Know whether yours does.
- Pressure to sign today or promises of “guaranteed approval.”
Bottom Line
To know what an MCA really costs, work out the payback (advance × factor rate), subtract the advance, add the fees, then convert to APR for the term you will actually repay over. On $100,000 at a typical 1.30 factor, that is $30,000 in factor cost, about $33,000 with a 3% origination fee, and an APR well above 100%. Put your own numbers into our merchant cash advance calculator before you sign.
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