This merchant cash advance cost estimator from Mesaside Advances, a small-business funding broker in Cheyenne, Wyoming, multiplies an advance by its factor to show the total to be delivered and the dollar cost, and estimates remittance time from a holdback and daily card sales. Run it once per offer to compare. A merchant cash advance is not a loan; results are illustrative only.
The arithmetic
- Total to deliver = advance × factor
- Cost of the advance = total to deliver − advance
- Collected per day = average daily card sales × holdback percentage ÷ 100
- Business days to finish = total to deliver ÷ collected per day, rounded up
If the offer lists the advance and the total but not the factor, divide the total by the advance to recover it.
Comparing two offers
Run the estimator once for each offer and write the results in a table like this one. The figures in the first column are labels, not values.
| Offer A | Offer B | |
|---|---|---|
| Amount actually received, after any fees | ||
| Total to deliver | ||
| Cost in dollars | ||
| Holdback or fixed debit, and how often | ||
| Estimated business days to finish | ||
| Reconciliation, stacking and default terms |
The cheaper offer is the one with the lower cost for the amount you actually receive, weighed against how quickly it takes money out of the business. A smaller cost collected over far fewer days can strain cash flow more than a slightly larger one spread out.
If the offer uses a fixed debit
Many advances collect a set amount each business day instead of a share of each card batch. The holdback boxes do not apply. Divide the total to deliver from the estimator by the daily 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.
What the estimate leaves out
- Fees deducted from the advance, which raise the true cost per dollar received; rerun with the net amount as the advance to see the effect
- Real sales, which rise and fall; with a holdback, stronger sales finish sooner at the same dollar cost
- Any early-delivery discount the contract may offer
- Other advances or loans whose payments would come out of the same deposits
The estimator does not produce an APR. Any yearly figure for an advance depends on an assumption about how long remittance lasts. APR vs. factor rate explains why.
Before you accept an advance
Set the cost and time beside a loan or line of credit for the same need, using the total cost of funding calculator. Read how merchant cash advances work, including reconciliation, stacking and default, and have an attorney review the agreement and any personal guarantee. More tools are in the resources section.
By Mesaside Advances · Updated