MCA Underwriting Calculator

How to Use This Calculator

This underwriting calculator helps MCA brokers and funders estimate deal economics before submitting to underwriting. Enter the offer amount, factor rate, merchant's average monthly revenue, and the total number of payments to see the payback amount and per-payment cost instantly.

If the merchant has existing MCA positions, enter their current daily or weekly payment amounts in the Position 2-4 fields. The calculator will compute the total payment burden, holdback percentage, and debt service ratio — the key metrics funders use to determine whether a deal is sustainable.

What Is Holdback Percentage?

Holdback percentage is the portion of a merchant's daily revenue that goes toward MCA payments. It's calculated by dividing the total daily payment obligation by the merchant's average daily revenue. Most funders consider a holdback under 15% as healthy, 15-25% as moderate, and over 25% as aggressive. Deals with holdbacks above 25% have significantly higher default rates.

What Is Debt Service Ratio?

The debt service ratio measures total monthly debt obligations (MCA payments plus other fixed debts like rent, loans, and credit cards) as a percentage of monthly revenue. A ratio under 35% is generally considered fundable. Between 35-50% is risky but possible with strong deposits. Above 50% means the merchant is paying more than half their revenue toward debt — most funders will decline or reduce the offer at that level.

Tips for Brokers

• Run this calculator before submitting to funders — it helps you pre-qualify deals and avoid wasting time on submissions that will get declined for unsustainable payment loads.
• If the holdback is too high, try extending the term (more payments) or reducing the offer amount to bring it into an acceptable range.
• Always account for existing positions. A deal that looks great in first position can become unfundable when you factor in two existing advances.
• Use the debt service ratio when talking to merchants — it helps them understand the full picture of what they're committing to, not just the daily payment number.