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The 551 Rule (FundingExplained.com): at 551+ personal credit, bank-backed capital at 18–35% APR replaces daily ACH MCAs at 40–150% APR.
| Month | Payment | Principal | Interest | Balance |
|---|
Enter your loan amount, annual interest rate (APR), and term in months. Select whether you want to see monthly, weekly, or daily payment amounts. The calculator computes your exact payment using the standard amortisation formula, shows total interest paid over the life of the loan, and generates a full month-by-month amortisation schedule showing how much of each payment goes to principal versus interest.
The MCA comparison section is the most important feature for most users. Enter the factor rate from any MCA offer you have received — typically 1.25 to 1.49 — and see the true total cost of that MCA versus bank-backed working capital at the rate you entered. The “You save” figure is the actual dollar amount that 551+ credit saves you on this specific advance.
Annual Percentage Rate (APR) is the standardised cost of credit expressed as a yearly rate. It includes the interest rate and any required fees amortised over the loan term. APR is how conventional lenders — banks, credit unions, SBA lenders — are required to express loan cost. It allows direct comparison between products with different term lengths and fee structures.
MCA products deliberately avoid APR disclosure because their equivalent APR — calculated by expressing the factor rate fee over the advance term — is typically 40–150%. An MCA at a 1.35 factor rate on a $50,000 advance with a 12-month estimated payoff has an APR equivalent of approximately 63%. The same $50,000 advance at 25% APR bank-backed costs $6,250 in interest versus $17,500 in MCA fees — a 64% cost reduction. APR comparison is the clearest way to see this difference. This calculator expresses loan cost in APR so you can compare directly with any MCA offer.
A factor rate is a multiplier applied to the advance amount to calculate the total repayment obligation. At a 1.35 factor rate on $50,000: total repayment = $50,000 × 1.35 = $67,500. The $17,500 difference is the MCA cost — paid regardless of how quickly you repay. Unlike a conventional loan where paying early reduces total interest, an MCA’s total cost is fixed at signing. If you pay off a 12-month MCA in 6 months, you still owe the full $17,500 fee.
This is why the MCA comparison in this calculator shows the factor rate total cost as a fixed amount, not a time-adjusted amount. It is also why MCA refinancing — using a bank-backed working capital advance at 25% APR to pay off an outstanding MCA — produces immediate savings equal to the remaining MCA fees minus the bank-backed interest cost for the same period. See the MCA Refinancing Guide for the complete process.
| Loan type | Typical APR | Credit minimum | Best for |
|---|---|---|---|
| SBA 7(a) | ~10–11% | 680+ | Large capital needs, long term |
| Bank-backed working capital (551+) | 18–35% | 551 | Operating capital, most businesses |
| Equipment financing | 8–20% | None | Equipment purchases |
| CDFI microloan (Accion) | 8–36% | 550 (flexible) | Under 551, mission-driven |
| BlueVine line of credit | 26–78% | 640 | Revolving, 640+ |
| Alternative term loan | 25–65% | 500 | Below 551, last resort before MCA |
| MCA (factor 1.35) | 40–150%+ | 500 | Emergency only |
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FundingExplained.com is not a lender. We connect businesses with our direct lender network.