Depending on the factor rate and how fast an advance is repaid, the same kind of deal can cost under 20% a year or well over 300%. These tables show the estimated APR for common merchant cash advance factor rates and payback periods, so you can see where your own advance falls.
The short answer: A merchant cash advance's APR depends on its factor rate and how fast it's repaid. With daily payments, a 1.35 factor costs about 126% APR over 6 months but about 63% over 12 months; a 1.50 factor repaid in 3 months is about 346%. The tables below cover factor rates 1.15–1.50 and terms of 3–18 months.
Most merchant cash advances are repaid by ACH debit every business day. This table assumes 21 business days a month and equal daily payments starting the next business day.
| Factor rate | 3 mo | 4 mo | 6 mo | 9 mo | 12 mo | 18 mo |
|---|---|---|---|---|---|---|
| 1.15 | 113% | 85% | 57% | 38% | 29% | 19% |
| 1.20 | 149% | 112% | 75% | 50% | 38% | 25% |
| 1.25 | 183% | 138% | 92% | 62% | 46% | 31% |
| 1.30 | 217% | 163% | 109% | 73% | 55% | 37% |
| 1.35 | 250% | 188% | 126% | 84% | 63% | 42% |
| 1.40 | 283% | 213% | 142% | 95% | 71% | 48% |
| 1.45 | 314% | 237% | 158% | 106% | 79% | 53% |
| 1.50 | 346% | 260% | 174% | 116% | 87% | 58% |
Weekly payment schedules cost slightly less than daily ones at the same factor rate and term, because each payment is made a little later. This table assumes 52 equal weekly payments a year.
| Factor rate | 3 mo | 4 mo | 6 mo | 9 mo | 12 mo | 18 mo |
|---|---|---|---|---|---|---|
| 1.15 | 107% | 83% | 55% | 37% | 28% | 19% |
| 1.20 | 141% | 109% | 73% | 49% | 37% | 25% |
| 1.25 | 174% | 135% | 90% | 61% | 46% | 31% |
| 1.30 | 207% | 160% | 107% | 72% | 54% | 36% |
| 1.35 | 239% | 185% | 123% | 83% | 62% | 42% |
| 1.40 | 270% | 209% | 139% | 94% | 70% | 47% |
| 1.45 | 301% | 233% | 155% | 104% | 78% | 53% |
| 1.50 | 331% | 256% | 170% | 114% | 86% | 58% |
The dollar cost of an advance depends only on the factor rate. The term changes how much you pay per day or week, and therefore the APR.
| Factor rate | Total repaid | Cost | Daily payment, 6 months | Weekly payment, 6 months |
|---|---|---|---|---|
| 1.15 | $11,500 | $1,499 | $91.27 | $442.31 |
| 1.20 | $12,000 | $1,999 | $95.24 | $461.54 |
| 1.25 | $12,500 | $2,500 | $99.21 | $480.77 |
| 1.30 | $13,000 | $3,000 | $103.17 | $500.00 |
| 1.35 | $13,500 | $3,500 | $107.14 | $519.23 |
| 1.40 | $14,000 | $3,999 | $111.11 | $538.46 |
| 1.45 | $14,500 | $4,500 | $115.08 | $557.69 |
| 1.50 | $15,000 | $5,000 | $119.05 | $576.92 |
APR here is the annualized internal rate of return on the advance: the yearly rate at which the present value of all payments equals the amount funded, compounded at the payment frequency (252 business days or 52 weeks a year). It assumes the full factor amount is repaid in equal payments, the first one a period after funding, with no origination or other fees. Upfront fees, split-funding, reconciliation true-ups and early-payoff discounts will change the real number. For how factor rates work, see MCA factor rate to APR.
The full data set is available as a CSV file. You may reuse it with attribution to Renaissance Capital Advisors and a link to this page. Figures are estimates for educational use, not an offer or financial advice.
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