Cost of Capital · Updated Q1 2026
MCA Cost Index — Effective APR by Provider Tier (2026)
The MCA Cost Index translates the opaque factor-rate quotes used in the merchant cash advance industry into effective APRs that can be directly compared against term loans, SBA financing, and lines of credit.
The data
Benchmark factor rates and effective APRs across the merchant cash advance market.
| Provider tier | Typical factor | Effective APR |
|---|---|---|
| Tier 1 (Rapid, OnDeck, Credibly) | 1.18 – 1.32 | 38% – 65% APR |
| Tier 2 (Mid-market MCA) | 1.32 – 1.45 | 65% – 92% APR |
| Tier 3 (Sub-prime MCA) | 1.45 – 1.55 | 92% – 135% APR |
| Stacked positions (2nd+) | 1.49 – 1.65 | 120% – 180% APR |
| Inflection Financing Term Loan (refinance) | — | 9.9% – 16% APR |
| Inflection Financing SBA 7(a) (refinance) | — | Prime + 2.25% – 4.75% |
Methodology
Effective APR computed as ((factor - 1) × 365 / repayment days). Tiers grouped by provider market share and Inflection Financing refinance volume from those providers over trailing 12 months.
Key takeaways
- →Refinancing a Tier 2 MCA into an Inflection Financing term loan typically reduces effective cost by 50–75 points of APR.
- →Stacked MCA positions almost always qualify for SBA 7(a) consolidation under the SBA debt refinance rules.
- →The 'cost' difference between MCA and term financing is rarely about credit — it's about disclosure and underwriting depth.
Citation: Inflection Financing Commercial Lending Data, "MCA Cost Index — Effective APR by Provider Tier (2026)" (Q1 2026). Available at inflection-financing.com/data/mca-cost-index-2026.
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