There is no standard return. An MCA investor's result is the collections received, minus advanced capital, funder fees and write-offs. Factor rates of roughly 1.15–1.50 look high, but defaults, management fees and cash sitting idle between deals often reduce realized returns substantially.
The four things that decide your return
- Factor rate — sets the gross profit available on each deal.
- Default and write-off rate — the single biggest reduction to realized profit.
- Fees — upfront commission plus a percentage of every collection.
- Redeployment speed — cash sitting in the wallet between deals earns nothing.
How to calculate realized return honestly
Use closed deals only. Add the collections and recoveries received on deals that have finished, subtract the capital advanced into them, subtract all fees and any written-off balances. That figure divided by the capital advanced is your realized return for the period.
Projected profit on open deals is an estimate and falls every time a deal defaults, so keeping the two numbers separate prevents a portfolio from looking better than it is.
Why two investors with the same funder differ
Deal selection, participation size, timing and default luck all compound. An investor whose capital is fully deployed every month will out-earn one holding the same balance with a third of it idle, even at identical factor rates.
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More terms in the MCA glossary or run a deal through the MCA calculator.