How do you calculate the purchased amount?

In a simple factor-rate example, multiply the purchase price by the factor rate. A $50,000 purchase price multiplied by 1.35 equals a $67,500 purchased amount, before any separately disclosed fees.

Is a factor rate an APR?

No. A factor rate is a multiplier, while APR is an annualized measure with different assumptions. A factor rate by itself does not state an annualized cost.

Is there a universal acceptable payment-burden ratio?

No. A descriptive ratio can organize analysis, but acceptable levels and calculation methods differ by funder, product, industry, file strength, existing positions, and policy.

MCA Underwriting Math: Factor Rates and Payment Pressure

MCA underwriting math: factor rates, remittances, and payment pressure

Core MCA math connects the purchase price, factor rate, purchased amount, estimated remittance, true operating revenue, and existing payment pressure. The arithmetic is simple; the hard part is using verified inputs, distinguishing a multiplier from an annualized rate, and applying the funder's own policy instead of treating one ratio as universal.

Written and reviewed by Maoz Amos, Director of Underwriting at a fintechLast reviewed July 22, 2026

1. Purchased amount

purchase price × factor rate = purchased amount$50,000 × 1.35 = $67,500

The example excludes any separately disclosed fees and does not express an APR.

2. Illustrative scheduled remittance

purchased amount ÷ estimated remittance days = illustrative daily remittance$67,500 ÷ 130 business days = $519.23

The actual contract may use a percentage of receipts, an estimated ACH remittance, a weekly schedule, or reconciliation terms. Never infer contract rights from this classroom calculation.

3. Correct revenue before measuring pressure

gross deposits − identified non-operating inflows = estimated operating deposits$150,000 − $50,000 = $100,000

Using $150,000 as revenue would understate the burden in this fictional example.

4. Descriptive payment-burden example

(existing monthly remittances + proposed monthly remittance) ÷ operating deposits($12,000 + $10,000) ÷ $100,000 = 22%

This is an educational organizing ratio, not an industry standard or approval threshold. A defensible review also considers balances, volatility, seasonality, positions, use of funds, verification, and the complete file.

The calculation-control checklist

Label every input and its source period
Remove verified non-operating deposits before revenue-based ratios
Keep daily, weekly, monthly, and business-day assumptions explicit
Separate contract math from credit-policy judgment
Recalculate when an obligation, payoff, or remittance is corrected

MCA underwriting math: factor rates, remittances, and payment pressure

1. Purchased amount

2. Illustrative scheduled remittance

3. Correct revenue before measuring pressure

4. Descriptive payment-burden example

The calculation-control checklist

Method and primary sources

Questions learners ask

1. Purchased amount

2. Illustrative scheduled remittance

3. Correct revenue before measuring pressure

4. Descriptive payment-burden example

The calculation-control checklist

Method and primary sources

Questions learners ask

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