Expected return on an MCA deal is the profit promised by its factor rate — for example, a $10,000 advance at 1.35 is expected to return $3,500. Realized return is what was actually collected once the deal closed, after fees, reduced payments and defaults. Comparing the two by funding month shows how well a wallet's deals really performed.
What causes the gap
- Defaults and write-offs, which recover only part of the RTR.
- Settlements at a discount to the full amount owed.
- Funder management fees taken from collections.
- Deals still open, which have not realized anything yet.
Factor efficiency
Factor efficiency is gross RTR collected divided by expected (contracted) RTR across all deals. 100% means every promised dollar was collected; 80% means a fifth of the expected payback has not come in, whether from defaults, discounts or deals still paying.
Compare by funding month
Grouping deals by the month they were funded — and keeping each month's original expectations fixed — shows whether performance is improving or slipping over time, instead of blending old and new deals together.
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More terms in the MCA glossary or run a deal through the MCA calculator.