Short-Term Loan Calculator

How to Use the Short-Term Loan Calculator

Short-term business loans and Merchant Cash Advances (MCAs) are structured differently than traditional bank loans. Instead of a monthly APR, they use a “Factor Rate.” To use this calculator:

• Select whether you prefer Daily or Weekly payments. (Payments are automatically withdrawn from your business bank account).
• Enter your desired funding amount and an estimated Factor Rate.
• Adjust the term length to see how extending or shortening the timeline impacts your daily or weekly cash flow.

Understanding Factor Rates vs. Interest Rates

If you have never utilized alternative business funding, the terminology can be confusing. Here is exactly how short-term loan costs are calculated:

• What is a Factor Rate? A factor rate is a fixed decimal figure (usually between 1.10 and 1.49) that represents the total cost of borrowing. Unlike APR, which accrues over time, a factor rate is calculated exactly once when the loan is originated.
• How the Math Works: If you borrow $50,000 at a factor rate of 1.25, the total repayment amount is exactly $62,500 ($50,000 x 1.25). You will owe $62,500 regardless of whether you pay the loan off in 6 months or 12 months.
• Cost of Capital (Fee): This is the difference between your funding amount and your total repayment amount. In the example above, the cost of capital is $12,500.

Why Choose a Short-Term Loan?

While the cost of capital is generally higher than an SBA loan, short-term financing offers unique advantages for fast-moving businesses:

• Speed of Funding: Short-term loans and MCAs require minimal paperwork. Approval often takes hours, and funds can be deposited in your account within 24 to 48 hours.
• Lenient Credit Requirements: Because lenders focus heavily on your recent business revenue and cash flow, you can often secure short-term funding even with a less-than-perfect personal credit score.
• No Collateral Required: Most short-term advances are unsecured, meaning you do not have to pledge heavy equipment or real estate to get funded.

What the Short-Term Calculator Does (and Doesn’t) Do

• Estimates are not offers. Calculator outputs are illustrative and do not guarantee lender approval.
• Rates vary by risk profile. Your final factor rate will depend heavily on your monthly deposits, time in business, and industry risk.
• Payment schedules vary. While we estimate 21 business days in a month for daily payments, exact withdrawal schedules depend on the lender’s specific holiday and weekend processing rules.

Need Capital Fast?

If an inventory opportunity, unexpected repair, or payroll gap has popped up, short-term funding can solve the problem immediately. Apply now to see exactly how much capital your business qualifies for today.