The Merchant Cash Advance Cost Index.
A clear, computed table of representative advance scenarios and what they actually cost. Every number below is produced live in your browser by the same math engine our calculators run, so you can see the full cost spectrum at a glance, from a modest factor on a long term to a steep factor on a short daily one. Built for owners comparing offers, and for anyone who wants to cite a straight source on what these cost.
The cost index.
Each row is one representative advance. Total cost is fixed by the factor the day the contract is signed, it does not shrink if you pay early. The simple APR is the understated number brokers tend to quote; the true APR-equivalent is the annualized cost of the actual repayment stream. The cost band rates each scenario by its true APR-equivalent. Use the filters to narrow the spectrum.
| Advance | Factor | Term | Schedule | Payback | Total cost | Cents / $1 | Simple APR | True APR-equiv. | Cost band |
|---|
Showing all representative scenarios.
True APR-equivalent (estimate for comparison only, not a contractual APR). Figures are rounded for display; the engine carries full precision through the internal rate of return and rounds only on output.
Representative, illustrative scenarios, not offers. Individual terms vary by funder and underwriting.
What the index shows.
Read the table top to bottom and a few patterns hold every time. They are the things worth knowing before you sign anything.
The true cost runs well above the simple number.
Across these scenarios the true APR-equivalent lands roughly 1.7 to 1.8 times the simple figure. You repay the whole time, so your average balance is far below the advance, yet the fee is fixed. The simple number quietly understates the real price.
A longer term lowers the APR-equivalent at the same factor.
Hold the factor steady and stretch the term and the dollar cost stays identical, but the APR-equivalent falls because you spread the same fee over more days. A 1.40 factor over 18 months is far cheaper on an annualized basis than the same 1.40 over 6 months.
Short, steep, daily terms are the most expensive.
The highest APR-equivalents in the index pair a high factor with a short business-daily schedule. Fast money has a price, and a 1.49 factor paid off in six months can carry a true APR-equivalent well into the triple digits.
Cents on the dollar is the cleanest first read.
It is just the factor minus one, in cents. A 1.35 factor costs 35 cents per dollar advanced, no matter the term. It tells you the dollar cost instantly, then the APR-equivalent tells you how that cost feels once time is in the picture.
How these numbers are computed.
Methodology
Every figure comes from one shared engine, the same one behind our calculators. For each scenario we start from the advance and factor, then build the actual repayment schedule for the stated term and remittance frequency.
The fee is fixed by the factor.
payback = advance × factor · total cost = advance × (factor − 1)
The simple APR takes that cost over the advance and annualizes it with no credit for repaying as you go. The true APR-equivalent models the real cash flows, the advance in on day zero and a fixed remittance out every business day or week, then solves for the periodic internal rate of return and annualizes it by the number of periods in a year (252 for business-daily, 52 for weekly). We carry full precision through the internal rate of return and round only on output, so the same inputs always return the same result.
The true APR-equivalent is an estimate for comparison only, not a contractual APR. An advance is legally a purchase of receivables priced by a factor rate; we compute the equivalent solely so it can be weighed against products quoted as APR. For the full worked example, see how we calculate the true APR.
Run your own numbers.
The index is a reference. To see the same math on your actual offer, enter it into a calculator. No credit pull, nothing to decide.
MCA Cost & APR Calculator
Run your own offer. See payback, daily payment, the true APR-equivalent, payoff dates, and red flags. →
ToolFactor Rate to APR Converter
Turn a factor rate and term into the simple APR and the true APR-equivalent, side by side. →
MethodologyHow We Calculate the True APR
The exact method behind every number here, with a fully worked example. →
GuideThe Real Cost of an Advance
The cost cornerstone: how an advance is priced, and when its speed is worth it. →
No pressure
Nothing to decide today. When you want this math run against a real offer, it is a two-minute review with no credit pull. We will show you both the simple and the true number before anything changes.