What does an advance repaid from sales really cost?

Turn a factor rate or flat fee, repaid as a share of your sales, into an estimated APR and a total in dollars, at the level of sales you expect.

Last checked: October 21, 2026Worked out in your browser, nothing stored

A merchant cash advance and revenue-based finance work the same way. The provider pays you a lump sum and fixes the total you repay up front: the advance multiplied by a factor rate, or the advance plus a flat fee. Then it takes an agreed share of your card sales or revenue, usually by daily or weekly withdrawals from your bank account, until that total is paid.

The total never changes, but the time it takes does. If your sales are strong you repay quickly, and paying the same fee for a shorter time makes the money more expensive. This calculator works out every payment at your level of sales, then finds the APR the way the federal Truth in Lending rules (Regulation Z) do, as in the true cost of a loan, so you can compare the two. Because it depends on your sales, it is an estimate.

Estimated APR

100.24%

At your sales

Total cost

$5,500

The same at any level of sales

Time to repay

6.2 months

136 payments

Payment a business day

$184.62

10% of sales

Cash you receive: $19,500
Total you repay: $25,000
Provider's fee: $5,000

If your sales change
Sales a month	Time to repay	Estimated APR
$30,000Sales 25% lower	8.3 months	75.13%
$40,000Your sales	6.2 months	100.24%
$50,000Sales 25% higher	5.0 months	125.38%

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Worked example: A $20,000 advance at a factor rate of 1.25, repaid from 10% of sales every business day

A made-up example, not a quote from any provider. Sales are $40,000 a month, and a $500 fee is taken from the advance, so you receive $19,500 and repay $25,000.

Advance: $20,000
Fee taken from the advance: $500
Total repayable: $20,000 × 1.25: $25,000
Provider's fee: $5,000
Payment a business day: 10% of sales: $184.62
Time to repay: 6.2 months (136 payments)
Estimated APR: 100.24%

If sales were 25% higher, the same $5,000 fee would be paid off in 5.0 months, and the estimated APR would rise to 125.38%. The price you agreed does not change; only how long you have the money does.

Worth knowing

The fee is fixed, so repaying sooner does not save money. Repaying faster raises the estimated APR, because you pay the same fee for having the money for less time.
New York requires many providers to show an estimated APR on an offer, worked out under the federal Truth in Lending rules from your projected sales, and California requires an estimated APR too. Ask which sales figure the provider's estimate assumes, and enter the same figure here to compare like with like.
If your contract takes a fixed amount each business day or week instead of a share, enter the share of your sales that amount comes to. A fixed amount does not fall when sales fall unless the contract adjusts it, so check how and when it does.
Business days here are Monday to Friday. Public holidays are not counted, which changes the result very little.
Before you sign, check the contract for a personal guarantee and a confession of judgment, which can put your personal assets at risk. The merchant cash advance page explains both, and the rules that differ by state.

Routes this works for

Sources

12 CFR 1026, Appendix J (Regulation Z): annual percentage rate computations for closed-end credit · checked October 20, 2026
12 CFR 1026.3 (Regulation Z): exempt transactions, including business credit · checked October 21, 2026
New York Financial Services Law section 803: sales-based financing disclosures · checked October 17, 2026
California Financial Code, Division 9.5: Commercial Financing Disclosures (sections 22800 to 22807) · checked October 17, 2026
FTC Business Blog: Looking for small business financing? Read this first (June 10, 2020) · checked October 17, 2026
DFPI: Advisory to small businesses on merchant cash advances (April 14, 2025) · checked October 17, 2026

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