This merchant cash advance cost calculator from Keelpark Capital Group, a small-business funding broker in Jackson, Tennessee, computes an advance's total remitted, dollar cost and estimated remittance time from the advance amount, factor rate, holdback and daily sales. The page then shows how to set a term loan's total repaid beside it by hand. A merchant cash advance is not a loan. Results are illustrative arithmetic only.
Why the two are hard to compare
A term loan charges interest on a balance that falls as you repay, over a set term. A merchant cash advance is not a loan: a funder buys part of your future receipts, and a factor rate fixes the total it will collect at signing. That total does not shrink if remittance finishes sooner, unless the agreement says so. The fair comparison is therefore in dollars and in time, not in rates.
Side 1: the advance (this calculator)
- Total remitted = advance amount × factor rate
- Dollar cost = total remitted − advance amount
- Daily remittance = average daily card sales × holdback percentage ÷ 100
- Business days to finish = total remitted ÷ daily remittance
If the offer uses a fixed daily debit instead of a holdback, leave the holdback boxes empty and divide the total remitted by the debit by hand to get the number of business days. For a weekly debit, divide by the weekly amount to get the number of weeks.
Side 2: the loan
Run the same amount through the affordability calculator with the loan offer's interest rate and term. Its total interest is the loan's dollar cost before fees. Then fill in the comparison below with the two results and the charges stated in each offer.
A comparison table to fill in
| Measure | Advance | Term loan |
|---|---|---|
| Amount actually received after charges | Your figure | Your figure |
| Total paid back | Total remitted | Total repaid |
| Dollar cost (paid back minus received) | Your figure | Your figure |
| How long until finished | Estimated from sales | The loan term |
| Payment pattern | Daily or weekly, by holdback or fixed debit | Usually weekly or monthly installments |
| Early payoff | Total usually fixed unless the agreement offers a discount | May save interest; check for prepayment terms |
Divide each dollar cost by the months it covers to see the cost per month of use. A cheaper-looking total that finishes much faster can be the more expensive money per month.
What the comparison leaves out
- Charges deducted before funds arrive; use the net amount received
- How sales actually move; a holdback finishes faster when sales rise, at the same total
- Personal guarantees, UCC filings and default terms, which differ between the two
- Stacking: taking either one on top of an existing advance
Before you choose
Read how merchant cash advances work and compare the advance with a term loan or a line of credit. Have your attorney read either agreement. Both tools on this site are arithmetic only and are not offers.
By Keelpark Capital Group · Updated