This calculator from Mintstone Lending Group in Salisbury, Maryland multiplies a merchant cash advance by its factor rate to show the total collected and the dollar cost, and estimates collection time from a holdback share of sales. It uses figures you enter and is not an offer.
MCA Factor Rate Calculator in Salisbury, MD: What Goes in Each Box
- Advance amount: the sum the provider pays you.
- Factor rate: the multiplier on the offer, such as an invented 1.30.
- Holdback: the share of daily card sales the provider collects.
- Daily card sales: your average, from processing statements.
Factor Rate Calculator Math for a Wicomico County, MD Shop
Total collected equals the advance times the factor rate. Cost equals total collected minus the advance. Illustration only, invented figures: an advance of $20,000 with an invented factor rate set at 1.30 means $26,000 collected and $6,000 in cost. At an invented holdback of 10% on invented card sales of $1,500 a day, $150 is collected each sales day, so the invented total takes about 173 sales days.
Factor Rate to Interest Rate in Salisbury, MD: Why the Two Do Not Line Up
A factor rate is charged once on the full advance, while the amount outstanding falls with every collection. An interest rate is charged on the balance over time. So the cost of an advance, expressed as a yearly rate, comes out far higher than the factor minus one, and higher still when collection is short. Compare the dollar cost of the advance with the total cost of a loan for the same need.
Monthly Factor Rate Calculator: Collection Time in Months
Divide the estimated sales days by the days your business sells in a month to see the collection period in months. The shorter it is, the higher the cost per month of use. Fixed daily debits skip the holdback math: divide the total collected by the debit.
What the Calculator Leaves Out for Salisbury, MD Owners
Fees taken from the advance, returned-debit charges, default terms and renewals that roll a balance into a new advance are not in the math. Read the agreement for each. The merchant cash advance page explains holdbacks and fees, and term loans and the guides page cover the alternatives.
By Mintstone Lending Group ยท Updated