Equipment Financing vs MCA Calculator

For tangible equipment with verifiable resale value, almost always. Equipment financing typically runs 9-18% APR with the equipment as collateral and 24-72 month terms — far below MCA effective APRs of roughly 30-60%. MCAs win on equipment-adjacent purchases only when the asset isn't financeable (no clean VIN/serial or resale market), speed is binding, or credit doesn't clear equipment-financing thresholds.

It runs the same purchase amount through both products. The equipment-loan side amortizes your purchase price at the financing APR over the term you enter — a standard monthly payment and total cost (payments minus principal). The MCA side multiplies the purchase price by the factor rate to get total payback, then divides by the MCA term for a monthly cost. The tool shows both total cost and monthly payment side by side so you can weigh cash-flow burden against total dollars paid.

Mainly collateral and underwriting. Equipment financing is secured by the equipment itself — a repossessable, resellable asset — so lenders price it like secured debt (9-18% APR, multi-year terms). An MCA is priced against your future receivables with a UCC blanket lien across all business assets, not the equipment specifically, so it's priced and repaid more like unsecured working capital: a flat factor rate repaid over a short term, which works out to a much higher effective APR.

When the equipment itself doesn't qualify for financing — no clean title/VIN/serial, a private-party or auction purchase a lender won't underwrite, or resale value too thin to serve as collateral. It can also make sense when funding speed matters more than cost (MCA funding is typically same-week vs an equipment loan's underwriting timeline), or when the business's credit profile doesn't clear equipment-financing minimums. Outside those cases, running the numbers here usually shows equipment financing costs less and burdens monthly cash flow less.

It varies by lender, but the APR range this calculator assumes (9-18%) generally corresponds to FICO 650+ and at least a year in business. Weaker credit or a newer business doesn't necessarily rule out equipment financing — it usually means a higher rate within (or above) that range, or a lender that structures the deal with a larger down payment. Businesses that don't clear equipment-financing underwriting at all are the ones for whom an MCA becomes the realistic comparison this calculator is built to check.