Tools for
Owner/Operators
&
Trucking Fleets
A Merchant Cash Advance (MCA) is not a loan. It's a purchase of your future receivables. Because it's structured differently, MCA providers are not required to disclose an APR — instead they use a factor rate (e.g. 1.28), which tells you the total payback multiple but hides the true cost of short-term capital.
A factor rate of 1.28 on a $100,000 advance means you repay $128,000. That sounds straightforward — until you consider the repayment term. If you repay that $28,000 in cost over 6 months instead of 12, your effective APR roughly doubles. The shorter the term, the higher the APR.
Why it matters for trucking operators: MCA lenders are common in trucking because they approve quickly and don't require perfect credit. But APRs can range from 40% to well over 200%. Knowing your real number lets you compare against equipment financing, SBA loans, or factoring — and negotiate from a position of knowledge.
A merchant cash advance is not structured as a loan — legally it is the purchase of a portion of your future receivables — which is why MCA funders quote a factor rate instead of an interest rate and are generally not required to disclose an APR. A factor rate tells you the multiple you will repay. It says nothing about how fast you will repay it, and speed is where the cost lives.
The arithmetic is unforgiving. A factor rate of 1.28 on a $100,000 advance means repaying $128,000 — $28,000 in cost. Spread that over twelve months and the annualised rate is one thing; compress it into six months of daily payments and the same $28,000 becomes roughly twice the APR, because you had the use of the money for half as long. Two offers with identical factor rates can differ enormously in real cost purely on term.
This calculator converts the offer in front of you into an APR, so you can hold it up against an equipment loan, a line of credit, factoring, or a credit card and see the difference in a single comparable number.
Start with total payback: the advance amount multiplied by the factor rate. Subtract the advance to get your cost of capital. Then account for the repayment schedule — how much each payment is, how often it is taken, and over how many months. Because payments start immediately and your outstanding balance falls with each one, the effective annual rate is far higher than simply dividing the cost by the advance. The calculator handles the amortisation for you.
Factor rates commonly fall somewhere between about 1.1 and 1.5, but the factor rate alone tells you very little. A 1.15 repaid over four months of daily debits is more expensive in APR terms than a 1.30 repaid over eighteen months. Always ask for the term alongside the factor rate — a funder reluctant to give you the term is telling you something.
Because they are fast and the underwriting is light. Funders look at your bank deposits rather than your credit score, and money can arrive within a day or two. For a carrier facing a blown engine or an insurance lapse, that speed is real value. The cost of that speed is the point of this calculator — knowing the APR lets you decide whether the emergency justifies the price, or whether a slower option would still arrive in time.
Often much less than you would expect, and sometimes nothing at all. Because the obligation is a fixed payback amount rather than accruing interest, early repayment frequently means paying the full agreed total anyway — which actually raises your effective APR, since you had the money for less time. Some funders offer an early-payoff discount, but it has to be written into the agreement. Check before you assume it exists.
Stacking is taking a second or third advance while an existing one is still being repaid. Each new advance adds another daily or weekly debit against the same bank account, and the combined draw can exceed what the business generates — which is how carriers end up taking a fourth advance to service the first three. Most MCA agreements also prohibit stacking outright, making it a default event.
In rough order of cost: a bank or credit union term loan, an equipment loan secured against the truck, a business line of credit, and invoice factoring. All are cheaper than a typical MCA, and all are slower and harder to qualify for. If you have any runway at all, it is worth pricing those first — and if you are taking an MCA to cover a receivables gap, compare it against factoring specifically, since that is the same problem at a fraction of the price.