Merchant cash advance calculator

How the cost is worked out

A merchant cash advance has no interest rate and no term. The funder fixes the total you repay on day one by multiplying the advance by the factor rate: £40,000 at 1.3 means £52,000 back, a fixed cost of £12,000. Repayment then runs itself. Each day your card processor passes a fixed percentage of that day's takings, the holdback, to the funder until the total is cleared. The calculator converts your monthly card takings to a daily figure, applies the holdback, and divides the fixed repayment by that daily amount to estimate how long repayment takes; on the defaults that is around eight months. The last output is the one that matters. Because the cost is fixed but the time is not, the only fair way to compare an advance against a loan is to annualise the cost over the estimated repayment period, which is the effective annual cost. A 1.3 factor rate repaid in about eight months is roughly 46% a year expressed as an APR-style figure, and that is the number to put beside a loan quote, not the 1.3. Every figure here is indicative and for planning; the funder sets the actual terms once it has seen your card statements.

Factor rate versus APR: why 1.3 is not 30%

A factor rate of 1.3 looks like 30%, and quoting it that way is how an advance is made to sound comparable to a loan. It is not, for two reasons that both push the true annual cost higher.

The 30% is not charged over a year. It is charged over the repayment period. If the holdback clears the advance in eight months, you have paid a 30% charge for eight months' use of the money, which annualises to well over 40%.

Early repayment saves nothing. On a loan, interest accrues on a falling balance and stops when you repay, so clearing it early genuinely cuts the cost. On an advance the cost is fixed on day one: repay in five months instead of nine and you hand over exactly the same £12,000, so the faster your takings repay it, the higher the effective annual rate you actually paid.

The same logic cuts the other way, and it is the product's honest defence: in a slow period your repayments shrink with your takings, with no arrears and no fixed direct debit to miss, and the effective rate falls as the term stretches. An advance is buying flexibility at a premium. The calculator puts a number on that premium so you can decide whether the flexibility is worth it, or whether a fixed-payment loan at a fraction of the annual cost fits the job better.

What actually drives the factor rate and the offer

An advance is underwritten almost entirely on your card takings, which is why funders can decide in days. The main levers are:

Card turnover, and its consistency. Steady daily takings across the week and the year earn the keenest factor rates and the largest advances; volatile or declining takings price up or shrink the offer.

Time trading. Most funders want six to twelve months of card processing history. Longer, stable history supports a better rate.

Sector and card mix. Businesses that take most of their revenue by card, such as retail, hospitality, salons and takeaways, fit the product best. If cards are only a small slice of your revenue, the holdback covers less and the offer shrinks.

Seasonality. Funders read a seasonal pattern from your statements and size the advance so the quiet months still repay comfortably.

Existing advances. Taking a second advance on top of a live one (stacking) is the fastest route to an unaffordable holdback, and good funders decline it. Renewing with the same funder after a clean first advance, by contrast, usually earns a better factor rate.

The table below gives indicative ranges; they are illustrative only, and the offer you receive is the funder's alone.

How much you can raise, and what funders look for

UK merchant cash advances typically run from about £5,000 to £500,000, with the rule of thumb at one to one and a half times your average monthly card takings, sized so the holdback clears the advance in roughly six to twelve months. Because the repayment rides on card takings, the product reaches businesses that a bank loan often does not: newer companies, thin-file borrowers and seasonal trades with strong card revenue. To move quickly, have ready your last six to twelve months of card processing statements, three to six months of business bank statements, and the directors' details; most funders want a personal guarantee, and decisions commonly come back inside a couple of days. Funders are assessing two things: whether your card takings comfortably absorb the holdback, and whether the trend is stable enough to clear the advance in the expected window. Because we place these deals rather than fund ourselves, we match the case to funders whose appetite fits your sector, takings level and history, rather than firing one application at a single desk. Any figure discussed before a formal offer is indicative; the advance, the factor rate and the holdback are the funder's decision.

How we help you get a sharper deal

A handful of things genuinely move the price on an advance, and our job as your broker is to line them up in your favour before a funder sees the file.

We take it to the right funder first. The UK advance market is a mix of processor-tied funders, independents and fintechs, each with a different appetite by sector, takings level and history. The same business can be offered 1.2 at one desk and 1.45 at another. We hold that criteria detail across our panel, so we focus your case on the funders most likely to price it keenly.

We structure the deal to price well. We will size the advance to what the job actually needs rather than the maximum on offer, sanity-check the holdback against your margins so the quiet months still work, and time a renewal properly instead of stacking a second advance on top of a live one.

We tell you straight what is realistic. The effective annual cost of an advance is high, and for some jobs a term loan, invoice finance or a revolving facility does the same work for materially less. We will show you that comparison honestly, and if the advance is still the right tool for the speed and flexibility you need, we will get you the sharpest factor rate we can. It costs nothing to have us model it, and there is no obligation. Send us your card statements and we will come back with indicative terms from funders whose criteria fit.