Is This Capital Appropriate for Your Business?

How to Read These Results

This business capital calculator is an educational tool. It translates a financing offer into the numbers that actually matter to your business: what the capital costs, how much it takes out of cash flow each month, and whether the return you expect from the funds is likely to outweigh that cost. The goal is responsible business financing — understanding the obligation before you take it.

Estimated Cost of Capital

The cost of capital is the difference between what you receive and what you pay back. For a term loan this is primarily interest; for a Merchant Cash Advance it is the difference between the advance and the total payback set by the factor rate. A lower cost of capital is generally better, but cost alone doesn't tell you whether the financing is appropriate — that depends on what the capital earns in return.

Estimated Monthly Debt Burden

This is the monthly equivalent of the new payment plus any existing debt payments you already make. Daily and weekly MCA payments are converted to a monthly figure so you can compare them directly to a traditional monthly loan payment. A high monthly burden leaves less room for operating expenses and unexpected costs.

Payment as a Percentage of Revenue

This shows how much of your monthly revenue goes toward the new payment. As a general educational guideline, when a single obligation consumes a large share of revenue, it can place significant pressure on cash flow. Businesses with thinner margins are more sensitive to this ratio than businesses with wider margins.

Cash Flow After Debt Payments

This is what remains after operating expenses and all debt payments. A negative figure means the business is spending more than it brings in once the new obligation begins — a warning sign that the structure may not be appropriate without a clear, expected return that offsets the shortfall.

Expected Return vs. Cost of Capital

Responsible business financing depends on whether the capital is expected to generate a return that exceeds its cost. If the funds are deployed into an opportunity — inventory, equipment, expansion, or a time- sensitive purchase — the additional revenue or savings should comfortably exceed the monthly cost of the capital. When the expected return falls short, the financing may create a larger financial burden rather than an opportunity.

Already Under Payment Pressure?

If your business is already struggling with stacked MCA debt or daily payment pressure, borrowing more may not be the right answer. MCA debt restructuring, a buyout, or another refinancing structure may be more appropriate than additional capital. Explore MCA buyout and restructuring options or use our payment calculator to measure your current burden first.