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MCA vs term loan vs line of credit calculator
Put the same amount through three kinds of financing and compare the total cost, the payment and the annual rate side by side, including fees. Change the defaults to match the offers you actually have.
The merchant cash advance is modeled as equal payments every business day (21.67 a month) across the term. The term loan and line of credit are modeled as equal monthly payments that fully repay the amount over the months you enter. Fees are treated as taken out of the money you receive, so the APR shown includes them. Rates and fees you will be offered depend on your business and credit. Estimate only. Not an offer of financing.
Total cost, payment and APR are three different questions
Total cost is what you pay on top of what you borrowed, including fees. It answers “how much does this money cost me in dollars?”
Payment is what leaves your account each day or month. A merchant cash advance usually has the smallest single payment but the most of them, and the daily debit can strain cash flow even when the dollar cost looks reasonable.
APR puts all three on the same yearly scale. A short advance can have a modest dollar cost and still carry a very high APR, because you have the money for only a few months. Longer loans often cost more in total dollars at a much lower APR.
When a merchant cash advance can still make sense
Advances fund in days, often with weaker credit and less paperwork. If the money produces a fast return, such as inventory you already have orders for, the speed may be worth the price. If the money covers a cash shortfall with no clear payback, the high cost usually makes the problem bigger.
Not sure which kind of financing you would qualify for? Send one short request and a funding partner will tell you your options. Free, no obligation.
Common questions
Is a merchant cash advance a loan?
Legally, most are structured as a purchase of your future receivables, not a loan, which is why they quote a factor rate instead of an interest rate. Economically you still repay more than you received, so comparing them by APR is useful. Our guide on how a merchant cash advance works explains the difference.
What rates should I enter for a term loan or line of credit?
Use the rates in offers you have. If you have none yet, the defaults are rough middle-of-market figures for online lenders. Bank and SBA loans are often lower; see our SBA loans vs merchant cash advances guide.
Why does the cheapest option have a higher total cost sometimes?
Longer terms add more months of interest, so a low-APR loan over several years can cost more dollars than a short, expensive advance. The table shows both so you can decide which matters more to your cash flow.
Does this tool store my numbers?
No. Everything is calculated in your browser.
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