Guide · What it costs
How is the daily payment on a cash advance calculated?
By Alex Makowski Published
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.
In this guide
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01
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
02
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.
03
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.
Written by
Alex Makowski, Owner
Alex Makowski owns and runs Business Loans for America and has been placing funding for U.S. small businesses since 2021. Businesses he has worked with have secured $50M+ in financing across 1,200+ placements. He writes and reviews every guide on this site.
FAQ
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.
Guides
More on what it costs
$50,000, four ways
$15,000 on an advance over six months, or $12,000 to $17,000 on equipment spread over five years. Same money, different jobs.
Short term or long term
Longer usually costs more in total and less per week. The right answer is the longest term whose total you can stomach.
The price of equipment money
Close to bank pricing for a strong file, into the twenties for a startup or a low score. The machine is why.
Lower factor, not always cheaper
A 1.2 with high fees and a four-month term can cost more per month than a 1.3 over ten. Compare in dollars.
Worse than advertised
Files are graded A to D on deposits, balance and history. The advertised rate is the A grade. Most files are not A.
What is negotiable
The factor moves a little. The term, the payment frequency, the fees and the amount move more. Ask before signing, never after.
Sources
- Consumer Financial Protection BureauFederal consumer-finance regulator. Publishes guidance on credit terms and disclosure.
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