MCA Calculations: Factor Rate, Payback & Performance
Merchant cash advance math is built on one core formula: total payback equals the advance amount multiplied by the factor rate. Every other figure — balance, percentage paid, and the performance score — flows from there. This guide breaks down each calculation in plain terms with worked examples.
Key takeaways
- Payback = Advance Amount × Factor Rate. A $50,000 advance at 1.40 = $70,000 owed.
- Balance = Payback − payments collected (cleared, or pending if you count in-transit payments).
- Percentage Paid = Total Paid ÷ Payback × 100.
- Performance % = % Paid ÷ % Expected Time Elapsed × 100; ~100% is on track.
- Returned (NSF) payments do not reduce the balance.
How do you calculate MCA payback?
Total payback is the advance amount multiplied by the factor rate. The factor rate is a fixed multiplier, so the payback never changes as the balance is paid down — unlike interest, which accrues on a declining balance.
Step by step: calculating a deal’s numbers
- Payback. Multiply the advance by the factor rate. $50,000 × 1.40 = $70,000.
- Balance. Subtract payments collected from the payback. After $24,500 collected: $70,000 − $24,500 = $45,500.
- Percentage paid. Divide total paid by payback. $24,500 ÷ $70,000 = 35%.
What is the MCA performance score?
The performance score compares how much of the advance has been repaid against how far along the deal should be by now. It is calculated as the percentage paid divided by the percentage of expected duration elapsed, times 100. Around 100% means repayment is on schedule, above 100% means the merchant is ahead, and below 100% means behind.
A Business Performance variant uses only business days, which is fairer for daily-collection deals because weekends don’t count against the merchant. The portfolio-wide gauge averages open deals on a 0–201% scale.
Quick reference: the core MCA formulas
| Metric | Formula | How to read it |
|---|---|---|
| Payback | Advance Amount × Factor Rate | Total the merchant repays. |
| Balance | Payback − Payments Collected | What’s still owed (returns don’t reduce it). |
| Percentage Paid | (Total Paid ÷ Payback) × 100 | Progress toward full repayment. |
| % Time Elapsed | (Days Elapsed ÷ Expected Duration) × 100 | Where the deal should be by now. |
| Performance % | (% Paid ÷ % Time Elapsed) × 100 | On-schedule check; 100% = on track. |
| Net Profit to Date | Collected − (Collected ÷ Factor Rate) | Profit earned so far. |
Track every deal’s numbers automatically
MCA Track computes payback, balance, percentage paid, and collected-payment totals for every advance in real time — including renewals and reups — and rolls them up into a portfolio dashboard. See the dashboard guide, the complete servicing software guide, or book a walkthrough →.
Note that factor-rate cost is not an annual rate — but several states now require MCA providers to disclose an estimated APR before funding. See merchant cash advance regulation and disclosure laws by state.
Frequently asked questions
Subtract 1 from the factor rate and multiply by 100. A 1.40 factor rate equals a 40% cost of capital over the life of the advance (not an annualized rate).
No. A returned (NSF) payment is reversed, does not count toward the paid balance, and can trigger a return fee on the advance.
It means the merchant is repaying faster than the expected schedule — the percentage paid is ahead of the percentage of expected time elapsed.
Cleared balance counts only fully settled payments; pending balance also counts payments that have been submitted but haven’t settled yet.