How Long Does an MCA Last?
Most merchant cash advances are set up to pay off over several months, often somewhere between four and eighteen. The real length is the total payback divided by your payment, counted in business days or weeks. If payments follow your sales, a slow stretch makes it longer. Paying faster doesn't lower the cost unless the funder gives an early payoff discount.
How do you work out the length of an MCA?
Term in payments equals total payback divided by the payment. Say $50,000 at a 1.35 factor, so $67,500 back, paid $540 each business day. That's 125 payments. At five debits a week, about 25 weeks, or roughly six months.
| Payment | Number of payments | About how long |
|---|---|---|
| $540 daily | 125 | 25 weeks |
| $450 daily | 150 | 30 weeks |
| $2,700 weekly | 25 | 25 weeks |
What changes how long it lasts?
- Reconciliation lowering the payment after slow months.
- Bank holidays, which skip debits.
- Missed or returned payments.
- A renewal that replaces the balance with a new advance.
Does a split payment run longer in a slow season?
Yes. A split takes a share of each deposit, so slower sales mean smaller payments and a longer term. A fixed daily or weekly debit keeps the same length no matter what sales do, unless you ask for a reconciliation.
How do you estimate your own payoff date?
- Find the total payback on your contract.
- Subtract what you've paid so far.
- Divide what's left by your payment.
- Divide by five if you pay each business day, or by one if you pay weekly, to get weeks.
Say $40,000 is left and you pay $400 a business day. That's 100 payments, or about 20 weeks. If reconciliation lowers the payment to $300, the same balance takes about 27 weeks. The total you owe stays the same either way.
What should you ask the funder?
- How many payments are scheduled, and how often?
- Does the payment follow my sales or stay fixed?
- Is there an early payoff discount?
- What happens to the term if I reconcile?
Where can you check your own numbers?
The short version is in the Repayment FAQ. To check the numbers on your own advance, use the MCA payment calculator.
Want a second look at your advance?
Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.