MCA, revenue-based financing, lines of credit, term loans, equipment financing & credit facilities — profitability, commissions, syndication, risk scoring. All parameters editable in Settings.
Deal Inputs
Fees & Costs
Deal Economics
Total Payback (RTR)—
Payment Amount—
Number of Payments—
Net Funded to Merchant (after fees)—
Gross Margin (payback − advance)—
+ Fee Income—
− Commission Paid—
− Cost of Capital—
− Expected Losses—
Net Profit—
ROI on Advance—
Annualized Return—
Effective APR-Equivalent (merchant side)—
APR-equivalent is an approximation for comparison only (simple annualization of total cost over the term against net funded amount). MCA purchases of future receivables are not loans.
RBF Inputs
Fees & Costs
RBF Economics
Total Payback (cap × advance)—
First Month Remittance—
Estimated Months to Repay—
+ Fee Income—
Net Profit—
ROI on Advance—
Annualized Return—
Effective APR-Equivalent (merchant side)—
Unlike an MCA's fixed payment, RBF remittance floats with revenue — so the term is estimated by simulating the revenue share against the payback cap month by month (with growth applied). Profit nets out commission, cost of capital over the estimated term, and expected losses.
Line of Credit Inputs
LOC Economics
Avg Drawn Balance—
Monthly Interest on Avg Balance—
Interest Income (period)—
+ Fee Income (origination + maintenance)—
Total Revenue—
− Cost of Capital—
− Expected Losses—
Net Profit—
Return on Avg Drawn (period)—
Annualized Yield—
Revolver economics are driven by utilization — interest accrues only on the drawn balance, while cost of capital is also modeled on the drawn balance. Raise utilization to see yields improve.
Term Loan Inputs
Term Loan Economics
Monthly Payment—
Total Interest—
+ Fee Income—
Borrower's Total Cost—
Avg Outstanding Balance—
− Cost of Capital—
− Expected Losses—
Net Profit—
ROI on Principal—
Annualized Return—
Standard amortization — payment computed from rate and term, cost of capital charged on the true average outstanding balance across the amortization schedule (not the full principal).
Equipment Financing Inputs
Equipment Deal Economics
Amount Financed—
Monthly Payment—
Residual Due at End—
Total of Payments (incl. residual)—
Interest Income—
+ Fee Income—
− Cost of Capital—
− Expected Losses—
Net Profit—
ROI on Financed Amount—
Annualized Return—
Payment amortizes the financed amount down to the residual/balloon over the term (set residual to 0 for a fully amortizing deal). The collateral value backing the deal is why loss rates here typically run lower than unsecured products.
Credit Facility Inputs
Facility Economics
Avg Drawn—
Avg Undrawn—
Interest Income—
+ Unused Line Fee Income—
+ Origination & Exit Fees—
Total Revenue—
− Cost of Capital—
− Expected Losses—
Net Profit—
Return on Avg Drawn (period)—
Annualized Yield on Facility—
Structure any bespoke deal: interest on drawn capital, a commitment fee on the undrawn portion, plus origination and exit fees on the full facility. Tune the utilization to stress-test whether the facility pays for the capital you're committing.
Scenario Comparison
Edit any input — results update live. Best net profit and best annualized return are highlighted in green. "Pull from Deal tab" copies the current Deal & Profit inputs into that scenario. Payments assume the daily schedule from Settings.
Commission Inputs
Spread commission = (sell − buy) × funded amount. Upfront points are paid by the funder on funding; PSF is charged to the merchant. Rep split shows the inside rep's share of total ISO commission.
Commission Breakdown
Payback @ Sell Rate—
Payback @ Buy Rate—
Spread Commission—
Upfront Points—
PSF Income—
Total ISO / Broker Commission—
Commission as % of Funded—
Rep's Share—
House Share—
Syndication Inputs
Fees Charged to Syndicate
Syndicate Partner Returns
Capital Invested—
+ Upfront Fee Paid—
Total Cash Out—
Share of Payback (gross)—
− Management Fee—
− Expected Losses—
Net Cash Back to Syndicate—
Syndicate Net Profit—
ROI—
Annualized Return—
Funder Side (on syndicated portion)
Mgmt Fee + Upfront Fee Income—
Merchant Profile
Proposed Deal
Risk Assessment
—
Composite Score: — / 100
Suggested Factor Rate—
Max Recommended Advance—
Requested vs Max—
Est. Payment Load (% of monthly revenue)—
Recommendation—
Factor Scores
Weights, tier thresholds, factor rates and advance multiples are all editable in Settings. Payment load uses the tier's suggested factor rate over the proposed term.
Existing Positions
Proposed New Position
Set the proposed advance to 0 to analyze the merchant's current stack only.
Debt Service Analysis
Positions—
Total Balance Outstanding—
Existing Monthly Debt Service—
Existing Payment Load—
New Position Monthly Payment—
Combined Monthly Debt Service—
Combined Payment Load—
Max New Advance @ Load Ceiling—
Verdict—
Payment load thresholds come from the Settings benchmarks (healthy at or below the "full score" load; the ceiling is the "zero score" load). Max new advance is the largest funding that keeps the combined load at or below the ceiling for the proposed factor and term.
Early Payoff
Remaining Balance—
Discount—
Payoff Amount—
Renewal / Refinance
New Payback (RTR)—
− Old Balance Netted Out—
− Origination Fee—
Net New Cash to Merchant—
Effective Cost on New Cash—
"Effective cost on new cash" shows the total new payback vs the actual fresh cash delivered — useful to see the true cost of a renewal where old balance is rolled in (double-dip check).
CAPITAL DEAL DESK • LEARNING CENTER
Funding products, explained for real deal work
Learn how each structure works, what can make it useful, what can go wrong, and which Deal Desk calculator helps you pressure-test it. Use this as an educational guide alongside your company's current credit policy, contracts, and compliance review.
Every offer is a bundle of choices: amount delivered, total dollars owed or purchased, payment method, expected duration, fees, collateral or personal support, and what happens when actual performance differs from the forecast. Identify those before discussing price.
Amount financed
Separate gross funding from net proceeds. Subtract withheld fees, broker compensation, payoff amounts, and any reserve or holdback. Ask what cash actually reaches the business.
Price is not one number
A factor rate is a payback multiple, not an APR. APR is an annualized measure that reflects timing and applicable charges. A flat fee, factor, APR, and total dollars paid answer different questions.
Payment capacity
Map all existing obligations against verified deposits and operating cash needs. A business can show strong gross sales and still lack room for another daily debit after payroll, rent, taxes, and supplier payments.
Training principle: model the merchant's remaining cash after all debt service under a base case and a downside case. A calculator is an estimate; it does not validate the bank data, contract, or legal characterization.
LESSON 2 • SALES-BASED FINANCING
Merchant Cash Advance (MCA)
An MCA is commonly described as a purchase of a business's future receivables or revenue for an upfront amount, with a purchased amount collected over time. Typical contracts use either a percentage of receivables (often called a holdback) or fixed periodic withdrawals. Labels alone do not determine legal treatment; actual contract terms and conduct matter.
The good
Can deliver capital quickly for a short, identifiable working-capital need.
Revenue-linked remittance can move with sales when the contract truly provides for reconciliation.
May fit a business whose cash receipts are frequent and measurable.
The bad
Frequent fixed withdrawals can strain cash flow even when the quoted payback looks manageable.
Stacking multiple positions can consume the same deposits and trigger NSF or default cycles.
Renewing too early can create a large payoff deduction and little usable new cash.
The ugly
When the business's revenue falls but fixed withdrawals do not, the product can become unaffordable quickly.
Confusing a factor rate with APR or presenting only the periodic payment hides the full economic cost.
Misleading sales claims, weak disclosure, aggressive collection, or a product that functions like debt despite its label can create serious legal and reputational exposure.
Walk-through: $100,000 gross advance at 1.35
Purchased/payback amount = $100,000 × 1.35 = $135,000; gross dollar cost = $35,000 before fees and any other charges. If collected in 9 months, average monthly remittance is roughly $15,000 (about $692 per business day using 21.7 business days/month). This is not an APR calculation and does not reflect the actual payment schedule or declining balance.
Now test net proceeds after fees, commissions, payoffs, cost of capital, and expected losses. Then stress collections: if sales fall 25%, can the merchant still cover this remittance plus its other obligations?
LESSON 3 • VARIABLE COLLECTIONS
Revenue-Based Financing (RBF)
RBF generally repays through an agreed share of revenue until a cap or other contractual amount is reached. The payment should respond to the revenue definition and reporting period in the contract. RBF is a broad market label; products vary, and the specific agreement controls.
The good
Remittances can scale with measured revenue, which may suit seasonal or variable-sales businesses.
A cap provides a visible total collection target.
It may align better than a rigid installment with a business that has uneven monthly receipts.
The bad
A share can still be burdensome during a low-margin period; revenue is not profit.
Definitions of revenue, exclusions, timing, reporting, and reconciliation must be understood.
Longer collection duration may raise effective annualized cost and keep the business encumbered longer.
The ugly
If revenue is overstated, collected too frequently, or not reconciled as promised, the business may face a payment burden it cannot sustain.
Growth assumptions can make estimated term look shorter than reality; declining sales can extend it.
Multiple revenue claims can collide, reducing cash available for operations.
Walk-through: $100,000, 1.30 cap, 10% of monthly revenue
Target collections are $130,000. At stable monthly revenue of $100,000, a 10% share implies about $10,000/month and roughly 13 months to collect the cap. At $70,000 revenue, the same share is $7,000/month and the simple estimate extends to about 18.6 months. This ignores timing, caps on periodic remittance, fees, and contract specifics.
Use the RBF tab: enter expected revenue and growth to see a scenario estimate. Also calculate a flat-sales and declining-sales case; the calculator's projection is not a promise of actual duration.
LESSON 4 • MATCH THE TOOL TO THE NEED
Other terms and how they work
Business line of credit (LOC)
A revolving commitment: the borrower draws as needed, repays, and may draw again subject to the agreement. Interest commonly accrues on amounts drawn; fees may apply to the commitment or unused amount. Review renewal/expiry, borrowing-base rules, rate changes, draw conditions, clean-up periods, and what converts the balance to amortizing repayment. Good: repeated short cash gaps. Bad: variable cost and lender discretion/renewal risk. Ugly: using a revolving line to fund persistent losses can leave the borrower fully drawn with no exit.
Term loan
A lump sum repaid over scheduled installments, usually principal plus interest. The amortization schedule determines how quickly principal declines and the total interest paid. Compare fixed versus floating rates, amortization versus maturity, fees, prepayment terms, covenants, collateral, guarantees, and default remedies. Good: defined use with predictable repayment capacity. Bad: payment continues when sales dip. Ugly: a balloon or refinance dependency with no credible repayment or takeout plan.
Equipment financing
Financing tied to an identified asset; the asset may secure the obligation. Cash invested upfront, term, rate, residual/balloon, fees, lien priority, title/lease structure, and asset value all matter. Good: useful-life and repayment period can be matched. Bad: equipment depreciates, becomes obsolete, or may be hard to liquidate. Ugly: the asset is worth much less than the balance after default, while business disruption prevents repayment.
Custom credit facility
A negotiated commitment with agreed draw mechanics, pricing, fees, covenants, collateral, and maturity; it may combine drawn interest with unused commitment fees. Test expected and peak utilization, how long capital is committed, and whether fees compensate for idle capacity and credit risk. Good: tailored liquidity for a specific operating cycle. Bad: headline APR misses unused-line, origination, exit, and monitoring costs. Ugly: availability is assumed but covenants, borrowing-base limits, or a material adverse condition prevent a draw when needed.
Commission, syndication, payoff & renewal
Commission: verify the actual sell/buy economics, fee treatment, and who receives which points. Syndication: allocate funded share, collections, servicing/management fee, reserve, losses, voting and reporting rights under signed agreements; the calculator is a simplified economics view. Payoff/renewal: obtain a dated payoff quote and reconcile it to contract terms; calculate new net cash after payoff and fees, then judge the cost on that new cash, not just the gross advance.
LESSON 5 • A REPEATABLE REVIEW
Underwriting workflow: from request to responsible offer
Understand the use. What is being funded, when does it produce cash, and is the need one-time, seasonal, or recurring?
Verify the business. Reconcile bank statements, deposits, sales reports, existing payoff letters, business identity, ownership, and use of proceeds. Investigate inconsistencies.
Build the full obligation picture. List every daily/weekly/monthly payment, remittance percentage, lien, lease, tax obligation, and contingent guarantee. Use .
Test affordability and downside. Calculate payment burden against deposits and operating cash, then stress revenue down, expenses up, and collection timing delayed. Do not rely on gross revenue alone.
Choose structure and explain total cost. Match term and payment frequency to the cash cycle. Explain net proceeds, total dollars, payment mechanics, fees, variable terms, and risks plainly.
Check policy and compliance. Escalate exceptions, state-specific commercial-financing disclosures, licensing/registration, fair-lending, privacy, servicing, and contract questions to the designated compliance/legal reviewer.
Document and monitor. Record assumptions, data sources, decision rationale, conditions, and follow-up triggers. Reconcile actual performance against the forecast.
LESSON 6 • PRACTICE
Desk drills
Try each prompt before opening the answer. Use the calculators to make your assumptions visible.
Drill A: The busy restaurant
A restaurant averages $120,000 monthly deposits, but has two existing daily positions totaling $1,050 per business day. A new offer adds $500/day. What do you check before deciding?
Strong review: reconcile deposits to gross sales and seasonality; calculate total existing and proposed monthly debt service (using actual business-day schedule); inspect NSFs/negative days and current cash balance; account for payroll, rent, taxes, food costs, and merchant processor settlements; verify payoffs and liens; model a sales decline and identify whether any variable remittance is truly reconciled. A high score alone is not approval.
Drill B: Seasonal landscaping company
The owner wants $100,000 before peak season. Revenue is low in winter and high in summer. Compare a fixed daily MCA payment with a 10% revenue share capped at $130,000.
Strong review: build a month-by-month cash forecast using actual seasonality, not annual average revenue; compare payment against off-season minimum cash flow; confirm revenue definition and reconciliation terms; test a delayed/weak season; include existing debt and project costs. Revenue-linked payments may flex, but $130,000 remains a substantial collection target and longer duration changes effective cost.
Drill C: Renewal offer
Current payoff is $42,000. A new $90,000 gross advance pays it off, with $4,000 in other withheld charges. What is the usable new cash?
Answer: $90,000 − $42,000 − $4,000 = $44,000 net new cash. Analyze the cost and repayment attached to the full new obligation relative to the $44,000 incremental liquidity, while confirming the dated payoff and any renewal discount or fee details.
Drill D: Equipment request
A company needs a $150,000 machine that should generate $8,000/month in additional gross margin. What matters besides the payment?
Strong review: validate net cash contribution after operating costs, installation and ramp-up; compare useful life to repayment term; inspect down payment, residual/balloon, collateral and lien priority, resale value, maintenance needs, and a delayed-revenue downside. Gross margin uplift is not necessarily free cash available for debt service.
REFERENCE
Quick glossary
Advance / principalAmount funded before withheld fees, payoffs, or reserves. “Net proceeds” is the cash actually delivered.
Factor rateA multiplier used to calculate a fixed payback amount in some products. It is not an interest rate or APR.
RTR / purchased amountTotal amount scheduled/targeted for collection under a sales-based agreement. Confirm the contract's definition.
Holdback / revenue shareContractual portion of specified receipts or revenue remitted to the funder.
APRAnnualized borrowing-cost measure under applicable rules and assumptions; compare like products and cash-flow timing.
AmortizationHow scheduled payments reduce principal and accrue interest over time.
UtilizationShare of a committed line/facility currently drawn. Drawn and unused portions can have different fees.
StackingMultiple financing obligations operating at once, often competing for the same cash receipts.
Buy rate / sell rateInternal pricing terms for a spread-based offer. Confirm the actual product and disclosure rules before communicating.
Residual / balloonA remaining lump sum at maturity rather than fully amortizing payments; requires a credible exit plan.
Cost of capitalThe institution's funding cost assumption. A calculator estimate may not capture hedging, liquidity, or servicing expense.
Expected lossA portfolio-level estimate, not a guarantee about one deal. Actual loss depends on default likelihood, exposure, and recovery.
READ MORE
Sources & limits
This course is general education, not legal, tax, accounting, investment, or credit approval advice. Product terms and legal obligations vary by contract and jurisdiction. Have the compliance/legal team review current requirements and approved customer disclosures.
The calculator results are simplified estimates based on user-entered assumptions. They are not an offer, APR disclosure, legal determination, or substitute for contract-level cash-flow modeling.
Default Deal Parameters
Other Product Defaults
Risk Tier Rules
Tier
Min Score
Suggested Factor
Max Advance (× monthly rev)
A
B
C
D
below C
Risk Factor Weights
Relative importance of each underwriting factor. They are normalized automatically, so they don't need to total 100.
Factor
Weight
Owner FICO
Time in Business
Monthly Revenue
Avg Daily Balance
NSFs / Month
Negative Days
Existing Positions
Payment Load Ratio
Industry Risk
Scoring Benchmarks
Saved ✓
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