Calculator
MCA vs Business Loan Calculator: Compare Total Cost and Cash Flow
A cash advance can look cheaper or pricier than a loan depending on whether you compare total dollars, annualized cost or the cash it pulls out of your account each month. See all three.
Side by side
| On $50,000 | Cash advance | Term loan |
|---|---|---|
| Net proceeds after fees | $50,000 | $50,000 |
| Total repaid | $65,000 | $59,909 |
| Total cost, including fees | $15,000 | $9,909 |
| Payment | $515.87 per business day | $2,496.21 per month |
| Average monthly cash out | $10,833 | $2,496 |
| Number of payments | 126 | 24 |
| Estimated APR, including fees | 109.3% | 18.0% |
Total cost difference
The loan costs $5,091 less
Monthly cash-flow difference
$8,337 more a month with the advance
Which number matters most?
Total cost is what the money costs you in dollars. It's the right number if you're sure you'll use the full term and can afford either payment.
Estimated APR puts both offers on a yearly basis so you can compare offers with different terms. Monthly cash out shows how much each option takes from your account in an average month, which decides whether you can keep paying suppliers, payroll and taxes while you repay.
Read more in our guide to factor rates vs APR.
How we calculate
Cash advance: total repaid is the amount multiplied by the factor rate, split evenly across the payments in your term (21 business days or 52/12 weeks per month).
Term loan: a fully amortizing loan with a level monthly payment at the interest rate you enter. Estimated APR for both is the rate at which the payments equal the funds you actually receive after upfront fees, annualized by the number of payments in a year. Prepayment discounts, penalties and variable rates aren't modeled.
Estimated APR here is a nominal annual rate: the rate per payment period multiplied by the number of periods in a year, the convention APR disclosures use. It isn't an effective annual rate, which compounds and comes out higher. It's our estimate for comparison, not the APR a provider must disclose under state rules, which set their own methods. These formulas are covered by automated tests and checked against independent calculations. Results remain estimates rather than provider disclosures.
Questions
Why would anyone choose a cash advance over a loan?
Speed, approval odds and flexibility. Advances are often easier to qualify for and can fund quickly, and a true percentage holdback falls when sales fall. Those features have a price, which this calculator helps you see in dollars and as an annualized rate.
Is the loan always cheaper?
Not in total dollars. A longer loan at a lower rate can cost more in total interest than a short advance, even though its APR is far lower. Compare the total cost, the APR and the monthly cash out together.
What rate should I enter for the loan?
Use the APR or interest rate from a real offer if you have one. If you're estimating, try a few rates to see how sensitive the comparison is.
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