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When you’re considering getting an MCA, it’s important to understand not just the advance amount you’ll receive, but also the total cost you’ll be charged for the MCA and your expected daily repayments. Our Merchant Cash Advance Calculator is designed to help you with this.
How to Use this MCA Calculator: Step-By-Step
Follow the steps in the table below in combination with the calculator to gain a clear understanding of what you’ll be expected to pay back.
| Step | Description |
|---|---|
| 1. Input Your Desired Advance Amount | The amount you wish to get as an advance from your MCA provider. |
| 2. Input the Factor Rate | The factor rate you’re likely to be offered by the MCA provider. This will be a multiplier for calculating the total repayment amount. |
| 3. Enter Your Average Monthly Credit Card Sales | The amount you usually generate from credit card sales each month. This helps in estimating your daily repayments. |
| 4. Indicate the Daily Holdback Percentage | This is the percentage of your daily credit card sales that will be withheld by the MCA provider for repayment purposes. |
| 5. Click ‘Calculate’ | After filling out the required fields, click the “Calculate” button to receive a detailed breakdown of your MCA costs. |
Merchant Cash Advance Calculator
Estimate the total cost of your MCA
Understanding The Calculator Results
Daily Repayment: This represents your daily financial commitment to repaying the MCA.
Repayment Duration: This indicates the estimated time it will take for you to fully repay the MCA, including all fees.
Total Repayment Amount: This is the sum total you will be responsible for paying back, encompassing both the principal and all associated fees.
While the daily payments, repayment duration, and total repayment amount give you a basic understanding of your MCA costs, keep in mind that additional fees from the MCA provider could alter the true cost.
Beware of Potential Hidden Fees
Keep in mind that MCAs can sometimes have fees that aren’t immediately obvious. Here’s a list of fees your MCA provider might charge you that you should be vigilant about:
- Initiation Fee: Costs associated with setting up the MCA.
- Risk Assessment Fee: Charges for evaluating the risk associated with granting you the advance.
- Payment Timing Fees: Additional costs for either early or late payments.
- Broker Charges: Fees if an intermediary helped you get the MCA.
- Miscellaneous Fees: These could include transaction or administrative costs.
Before signing any MCA agreement, always ask your MCA provider or broker about any additional fees. This will help you get a complete picture of the true cost of the MCA.
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The Bottom Line
Always calculate the total cost of your MCA before committing, manually or with a calculator. Ask your MCA provider to list any additional fees beyond the factor rate before signing your agreement. When you know the true cost of the cash advance, compare it to your business revenue to ensure the daily deductions won’t put stress on your business’s cash flow.