# Merchant cash advance true cost calculator

Source: https://businessloanbroker.ai/tools/mca-true-cost-calculator/
Site: BusinessLoanBroker.ai (powered by Levr)

> Turn a merchant cash advance factor rate into the total payback, the cost, the daily or weekly remittance, and an approximate APR. Free and instant.

A factor rate hides the real cost because it ignores time. Enter the advance, the factor rate, how long it will take to pay back, and the remittance frequency to see the cost in terms you can compare.

## Why does the APR look so high?

Because the full fee is charged no matter how fast you repay, and advances repay fast. A 1.30 factor rate on $100,000 costs $30,000 whether it takes 4 months or 12. Spread over 8 months with daily remittances, that is an APR well above 60%. That is the honest comparison point against a term loan at 15%. Read [APR vs factor rate](https://businessloanbroker.ai/guides/apr-vs-factor-rate/) for the math and [MCA vs term loan](https://businessloanbroker.ai/compare/mca-vs-term-loan/) for when each makes sense.

## What else should I check on an MCA offer?

The holdback percentage and whether it is a fixed daily amount or a share of sales, any reconciliation right if sales drop, fees deducted from the advance, whether a personal guarantee or confession of judgment is included, and what happens on renewal. The [merchant cash advance](https://businessloanbroker.ai/business-loans/merchant-cash-advance/) page covers each.

## Questions and answers
**Is an MCA ever the right choice?**

Sometimes: when the money earns more than it costs in a short window, when nothing else will approve the business, or when speed matters more than cost. It should be a bridge, not a habit.

**How is the APR estimated?**

By solving for the periodic rate that makes the remittances equal the cash received after fees, then annualizing. It is an approximation that gets closer the more regular your remittances are.

## Related
- [Merchant cash advances](https://businessloanbroker.ai/business-loans/merchant-cash-advance/)
- [Revenue based financing](https://businessloanbroker.ai/business-loans/revenue-based-financing/)
- [APR versus factor rate: how to compare them](https://businessloanbroker.ai/guides/apr-vs-factor-rate/)
- [Merchant cash advance versus term loan](https://businessloanbroker.ai/compare/mca-vs-term-loan/)

## Apply
Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-mca-calculator
MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)