The calculator multiplies the advance by the factor and divides the total by the daily holdback amount. The cash book, cash ratio, two-offer comparison and days-of-cover checks on this page are worked by hand with invented figures; the calculator does not compute them.
A cash book kept beside the advance at a Bowling Green, OH quick-service restaurant
A cash book records money in and out each day. With an advance running, the useful columns are card sales, the share the provider takes and what actually lands in the bank. An invented week at a 7% holdback:
| Day | Card sales | Holdback | Deposited |
|---|---|---|---|
| Monday | $1,840 | $128.80 | $1,711.20 |
| Tuesday | $2,310 | $161.70 | $2,148.30 |
| Wednesday | $1,675 | $117.25 | $1,557.75 |
| Thursday | $2,905 | $203.35 | $2,701.65 |
| Friday | $2,470 | $172.90 | $2,297.10 |
The provider took $784.00 that week and the restaurant's account received $10,416.00. The calculator on this page works from one average daily figure; a cash book like this shows the real days, which is the better check on whether payroll and supplier bills still clear.
The cash ratio before and after an advance, for a Bowling Green, OH quick-service restaurant
The cash ratio divides cash on hand by current liabilities, the bills due within a year. Illustration only, invented figures: a restaurant with $31,200 in cash and $24,000 of current liabilities is at 1.30. Taking a $15,000 advance at a 1.26 factor adds $15,000 of cash but also $18,900.00 still to be collected, counted here as a current liability.
The ratio moves from 1.30 to 1.08 by our arithmetic. The advance puts cash in the account but leaves the business owing more than it received, and the ratio shows that.
The direction depends on the starting point. A business whose cash ratio is below the advance divided by its total to be collected, here 0.79, would see the ratio rise instead, yet it would still owe more than the cash it took in.
Two offers for one Bowling Green, OH restaurant cost: an advance and an 18-month loan
Suppose a restaurant holds two offers for the same $15,000: an advance collected from card sales and a fixed loan. This page's calculator handles the first; the second takes a payment formula (invented figures):
| Measure | Advance at a 1.26 factor | Loan, 18 months at 13.85% |
|---|---|---|
| Cash out | $220.00 each business day (10% of $2,200) | $927.67 a month |
| Length | about 86 business days | 18 months |
| Cost | $3,900.00 | $1,698.06 |
The loan costs less in dollars here and spreads over a longer stretch, but it needs a partner willing to make a loan on the business's cash flow. Weigh the daily outflow, the monthly payment and the total cost together.
A payroll-week check for a Bowling Green, OH auto repair shop before signing an advance
Before signing, an owner can count how many days of operating costs the bank balance would cover, then see what a week of holdbacks does to that count. Illustration only, invented figures: a repair shop spends about $3,150 a day to run and keeps $40,950 in the bank, 13.0 days of cover. An advance taking $128.00 each business day removes $640.00 a week from that cushion.
After one week of remittances, with nothing else changing, cover falls to 12.8 days by our arithmetic. Running this check before signing shows whether the holdback leaves room for the shop's next payroll or a large parts order.
The calculator on this page supplies the per-day figure for a real offer: enter its advance, factor, holdback and average daily card sales, and the result shows the amount taken each business day beside the days to finish.
By Sandpark Lenders · Updated