Question 1

What is a Merchant Cash Advance (MCA)?

Accepted Answer

A Merchant Cash Advance is a type of business funding where a company receives a lump sum in exchange for a percentage of future sales. It is not a loan — repayment is made through daily or weekly deductions from your revenue (called the holdback or retrieval rate). MCAs are fast but typically more expensive than traditional financing.

Question 2

What is a factor rate?

Accepted Answer

A factor rate is a decimal multiplier used to calculate your total repayment amount. For example, a $50,000 advance at a 1.35 factor rate means you repay $67,500 total — regardless of how quickly you pay it back. Factor rates are not the same as interest rates and do not compound over time.

Question 3

How does the holdback percentage work?

Accepted Answer

The holdback (also called the retrieval rate) is the percentage of your daily or weekly credit and debit card sales that goes toward MCA repayment. If your holdback is 15% and you process $5,000 in card sales on a given day, $750 is automatically remitted to the MCA provider. On slower days you pay less; on busier days you pay more.

Question 4

What is Effective APR and why does Texas require it?

Accepted Answer

Effective APR expresses the true annualized cost of your MCA as a percentage. Texas Senate Bill 2677 requires commercial finance providers — including MCA funders — to disclose the APR to borrowers so they can compare costs across different financing products. The APR shown here is an estimate based on your projected repayment period.

Question 5

How accurate is this calculator?

Accepted Answer

The calculator provides estimates based on the inputs you enter. Actual daily payments will vary because they are tied to real-time card sales volume. The repayment period and APR are approximations — your actual experience may be faster or slower depending on your revenue.

Question 6

Can I apply for an MCA through Starting Gate Financial?

Accepted Answer

Yes! We partner with top MCA providers and can help you compare offers to find the best fit for your business. We recommend exploring all financing options — including business lines of credit and SBA loans — before committing to an MCA.

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