MCA field guide
How to calculate daily MCA payments
A transparent method for estimating daily and weekly remittances from amount, factor rate, term, and frequency.
Quick answer
Estimate the payment by multiplying the funded amount by the factor rate, then dividing total payback by the expected number of remittances. Confirm the actual schedule in the contract.
Calculate total payback first
Multiply the advance amount by the factor rate. For $75,000 at 1.38, total payback is $103,500. If fees are withheld from proceeds but not included in payback, record net proceeds separately.
Estimate the number of payments
A quick estimate uses 21.75 business days per month for daily remittance or 4.345 weeks per month for weekly remittance. A ten-month daily estimate therefore uses about 218 payments. Exact schedules vary around holidays and contract dates.
Measure payment burden
Convert the remittance back to a monthly equivalent and divide it by average monthly revenue. That percentage is not an approval rule, but it makes competing offers easier to compare and highlights a payment that may strain cash flow.
Practical checklist
- Confirm the funded amount.
- Confirm whether fees reduce net proceeds.
- Calculate total payback.
- Use the actual daily or weekly payment count when available.
- Convert the result to a monthly burden for comparison.
- Stress-test the payment against low-revenue months and current obligations.
Common questions
How many business days are in a month?
A planning estimate often uses 21.75, but the actual count varies by month, holidays, and contract schedule.
Should fees be added to payback?
Use the agreement. Some fees reduce proceeds, some affect the obligation, and disclosure rules vary.
Is estimated holdback the same as payment burden?
No. Holdback generally relates remittance to receipts, while monthly payment burden compares the monthly equivalent payment with monthly revenue.
Primary sources and context
- Consumer Financial Protection Bureau — Small business lending rule FAQsOfficial federal context for merchant cash advances and sales-based financing.
- California DFPI — Commercial financing disclosuresOfficial disclosure framework covering amount, cost, term, payments, and prepayment policy.
Methodology and corrections
This guide distinguishes calculations, common industry practice, and lender-specific policy. Criteria should be confirmed from the dated source on each lender profile. Report an error through the correction policy.