Guide

How is the daily payment on a cash advance calculated?

Total repayment divided by the number of business days in the term. $50,000 at a 1.3 factor is $65,000 back; over a six-month term of about 126 business days, that is roughly $516 every business day. Weekly is the same total divided by weeks: about $2,500. A true holdback advance is different — a fixed percentage of each day's card settlements, so the payment moves with sales and the term is an estimate.

Fixed daily: the arithmetic

Amount times factor equals total repayment. Total repayment divided by business days equals the daily debit. Funders count business days — roughly 21 a month, 252 a year, minus bank holidays — so a six-month term is about 126 debits and a twelve-month term about 252. $65,000 over 126 days is $516; over 252 days it is $258. The same $15,000 of cost, spread thinner.

Check the arithmetic on any offer. Multiply the quoted daily payment by the number of debits and compare it to the total repayment on the contract. They should match; when they do not, the difference is usually a fee that was not mentioned.

Cost of $50,000, by product

BANK TERM LOAN60 months · hardest to qualify for$13,700SBA 7(A)120 months · lowest monthly, slowest$34,200ONLINE TERM LOAN18 months · days, not months$11,500LINE OF CREDIT12 months · pay only on what you draw$7,400MERCHANT CASH ADVANCE9 months · fastest, no score floor$15,000$0$36,000
Total cost of capital on a $50,000 facility, with the term stated on every bar — a comparison that hides the term is not a comparison. An advance is the most expensive money here and the only one that reaches a business the bank has already declined. Illustrative figures at mid-range pricing, not an offer.

Weekly, and why to ask for it

The same total divided by the number of weeks, debited once a week. $65,000 over 26 weeks is $2,500. It costs the same and it fits a business paid on Fridays, on draws or at month-end far better than a daily debit that hits an account before the money arrives. Most funders will write weekly if asked before signing.

Holdback: the payment that moves

A true holdback takes a fixed percentage — often 10 to 20 percent — of each day's card settlements until the total is repaid. Good day, bigger payment; slow day, smaller; closed day, nothing. The term is therefore an estimate, and the contract usually states an expected term with the percentage set to hit it. This is the structure that suits seasonal and card-heavy businesses, and it has to be asked for by name: most advances written today are fixed debits with a reconciliation clause instead.

Sources

Related questions.

Does the daily payment change if my sales drop?
A fixed debit does not, unless you invoke a reconciliation clause and the funder grants it. A true holdback does, automatically. Know which you have before you need to.
What days is the payment taken?
Business days only, usually early morning by ACH from the account named in the contract. No debits on weekends or federal bank holidays, which is why a six-month term is about 126 payments and not 180.
Can I make the payment monthly instead?
Rarely on an advance. Monthly repayment generally means a longer, cheaper product — a term loan or a line — and a funder offering it is usually offering one of those.

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