A $100,000 advance is a meaningful piece of capital. Below is the math — what you pay, when you pay it, and what makes the cost go up or down — so the decision is informed.
The base scenario: $100K at 1.30 factor
- Advance: $100,000 (cash to your account)
- Factor rate: 1.30
- Total payback: $100,000 × 1.30 = $130,000
- Cost of capital: $130,000 - $100,000 = $30,000
- Term: approximately 150 business days (7 months)
- Daily payment: $130,000 ÷ 150 = approximately $867/day
- Weekly outflow: ~$4,335
- Monthly outflow: ~$18,800
The $30,000 cost is paid in equal daily ACH debits over the term. No upfront interest charge. No balloon. No separate origination payment in most contracts.
Cost scaling by factor rate
A $100K advance at different factors:
- 1.20 factor (best paper, rare): $120K payback, $20K cost. Daily payment $800.
- 1.25 factor (strong file): $125K payback, $25K cost. Daily payment $833.
- 1.30 factor (standard): $130K payback, $30K cost. Daily payment $867.
- 1.35 factor (Tier 2): $135K payback, $35K cost. Daily payment $900.
- 1.40 factor (Tier 2-3): $140K payback, $40K cost. Daily payment $933.
- 1.45 factor (Tier 3): $145K payback, $45K cost. Daily payment $967.
The spread from best to worst on a $100K is $25,000. A four-cent move on the factor rate equals a $4,000 move in your total cost.
What revenue size supports a $100K advance
The advance-to-revenue ratio is the underwriter's first check. Most funders cap at 1.0x-1.5x of monthly revenue.
- $80K/month revenue = $100K is 1.25x. Stretching but doable. Factor 1.35-1.40.
- $100K/month revenue = $100K is 1.0x. Standard zone. Factor 1.30-1.35.
- $150K/month revenue = $100K is 0.67x. Comfortable. Factor 1.28-1.32.
- $200K+/month revenue = $100K is ≤0.5x. Strong. Factor 1.25 or better.
The daily payment at $867 is roughly 19% of average daily revenue at $80K/month, 13% at $100K/month, and 8.7% at $150K/month. Underwriters target 8-12%; above that range you're stretching cash flow.
What you can actually do with $100K
Concrete uses where the $30K cost makes sense:
- Inventory for known demand. $100K of inventory turning at a 30% margin generates $30K of gross profit on the first turn. If you turn it 2-3 times in the 7-month term, the capital pays for itself 2-3x.
- Equipment that increases capacity. $100K of new equipment that adds 15-20% to your top line for years. Pay back in 7 months, keep the productivity gain forever.
- Bridging payroll for a major contract. Win a $300K contract with net-60 payment. $100K MCA covers payroll for 60 days. You collect $300K, pay back $130K, keep $170K plus the ongoing relationship.
- Renewal/consolidation. Replace existing higher-cost positions with one $100K advance at a better factor. Math works when the new factor is materially lower than the blended cost of what you're paying off.
Origination fees on $100K
Origination fees on advances at this size run 1-3% typically. On $100K that's $1,000-$3,000, sometimes deducted from the wire (you receive $97K-$99K) and sometimes added to the payback (you owe $131K-$133K). Always ask whether the factor includes origination or it's separate.
The honest stress test
Before taking a $100K MCA, run two checks:
- Worst-week test. Look at your worst week of revenue in the last 12 months. Can you absorb $4,335 of outflow that week without going negative? If no, the advance is too big.
- Coverage ratio test. Estimate the operating value the capital generates in the same 7 months. If it's not at least 1.0x the cost ($30K), reconsider — you're paying for capital that isn't earning back its cost.
If both pass, the $100K MCA at 1.30 factor is a defensible business decision. If either fails, resize down or rethink the use case.
Sources & References
- Bank denial and small business credit access figures cited in this piece are derived from the Federal Reserve Small Business Credit Survey. Approval rates for small business credit applications at large banks have ranged from approximately 13%-31% across recent survey years, depending on bank category and reporting period.
- Small business finance landscape and lending program data: SBA Office of Advocacy.
- Merchant cash advance industry standards and disclosure practices: Small Business Finance Association (SBFA).
- Commercial financing disclosure regulations referenced (NY FAIR Act, CA SB 1235/666/362, VA, UT) are summarized from the published statutes; consult counsel for specific compliance application.