Free calculator What a cash advance really costs
Merchant cash advance calculator
A cash advance is priced with a factor rate, not an interest rate, so it's hard to set beside a loan. Enter the offer to see what it costs a year once its fees are counted, figured the way an APR is, and what it costs in all.
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- Nothing you type is sent anywhere
- The full check's own offer math
$67,500 paid back for $50,000, at $450 each business day, with $1,500 of fees taken out first. The full check estimates about 9.00% a year for a bank term loan today.
Cash advance cost calculator
What would the advance cost you a year?
It starts with the made-up advance above. Replace it with the offer you have. Everything is worked out in your browser.
Yearly cost with feesYearly cost with fees. What the money costs in a year once the fees are counted, figured the way an APR is: the fees are taken off what you receive, and the rate is the one at which your payments pay that back. It's the fairest way to compare offers with different rates, fees and terms.
116% a year
You'd pay back $67,500 for $50,000 over about 7 months, and receive $48,500 after fees.
- What it costs in all
- $19,000$17,500 over the advance, plus $1,500 of fees
- Payments
- $450 each business dayabout $9,375 a month while it runs
- Paid off in
- About 7 months150 payments
- A bank term loan
- About 9.00% a yearThe advance costs about 13 times as much a year
Most lenders count an advance's payments as debt, at about $112,500 a year, when they work out whether you can take on a loan.
An estimate from the figures you entered. Read the agreement for what it says about paying early, missed payments and adjusting payments to your sales. In the full check, you can upload an offer and see it against your own figures.
Run the full checkWhy a factor rate isn't an interest rate
The faster you pay it back, the more it costs a year.
A factor rate of 1.35 sounds like 35%. But it's charged on the whole amount at the start, however soon you pay it back, and payments usually start within days. With a loan, interest is charged only on what you still owe.
The same $50,000 advance at 1.35, with the same fees, costs:
- About 140% a year, paid back over 6 months at $540 a day.
- About 116% a year, paid back over 7 months at $450 a day.
- About 69.98% a year, paid back over 12 months at $270 a day.
The yearly cost is figured the way an APR is: the fees come off what you receive, and it's the rate at which your payments pay that back. Daily payments are counted on about 250 business days a year.
A share of sales
Some advances take a share of each day's card sales or deposits, called the holdback, instead of a fixed amount. Then how long it runs depends on your sales: a slow month stretches it out, and a busy one ends it sooner and costs more a year.
How lenders see a cash advance
It counts as debt, and it shows on your bank statements.
- Most lenders count an advance's payments as debt, a year of them, when they work out whether your cash flow covers a new loan. The $50,000 advance above adds about $112,500 a year of payments.
- The daily or weekly debits show on your bank statements, and a lender will ask about each one.
- More than one advance at a time is a warning sign to most lenders.
Before you sign
- A confession of judgment lets the funder get a court judgment against you, if it says you've defaulted, without a lawsuit. Several states limit these. Have a lawyer read it first.
- Ask whether payments can be adjusted to your actual sales, how often, and how to ask.
- Ask whether paying it off early lowers what you owe. With a factor rate, it often doesn't.
- Look for a clause that bars other financing while it runs, which can stand in the way of a bank loan later.
Could a loan cost less?
See whether your cash flow covers a bank or SBA loan the way a lender works it out.
More free calculators
Find out whether you're ready for a loan instead.
The full check works out your coverage the way a lender will, and can read a cash advance offer against your own figures.
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