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Truth-in-Lending Calculator

Generate TILA-style disclosure metrics for commercial financing transactions.

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What Is a Truth-in-Lending Disclosure?

The Truth in Lending Act (TILA) requires consumer lenders to disclose four key numbers: APR, finance charge, amount financed, and total of payments. While TILA technically applies only to consumer credit, several states have enacted commercial financing disclosure laws that mirror TILA's format for business transactions including MCAs. California's SB 1235 and New York's CFDA both require TILA-style disclosures for commercial financing. This calculator generates all four TILA metrics for MCA deals so brokers can produce compliant disclosure documents. Even in states that do not yet require it, providing a TILA-style disclosure builds merchant trust and reduces the risk of future regulatory complaints.

How to Use This Calculator

Enter the amount financed

The net amount the merchant receives. This is the funded amount minus any upfront fees deducted before disbursement.

Enter the total finance charge

RTR minus amount financed. Include all fees (origination, processing, wire) that are part of the cost of the financing.

Set term and payment

The term and daily payment determine the APR. Verify these match the actual deal terms being offered to the merchant.

Key Concepts

Amount Financed

The net amount of credit provided to the merchant after deducting any prepaid finance charges (origination fees, processing fees). This is lower than the gross approval amount.

Finance Charge

The total dollar cost of the financing, including the factor rate markup and all fees. This is the number that surprises merchants most -- it makes the true cost visceral.

Total of Payments

Amount financed plus finance charge. The total amount the merchant will pay over the life of the advance. Equivalent to RTR in MCA terminology.

Expert Insights

Proactive Disclosure Is Defensive Strategy: Merchants who feel deceived about costs are the ones who file regulatory complaints, join class-action lawsuits, and default out of resentment. Providing clear TILA-style disclosure before signing eliminates the "I did not know" defense. It also protects you if a regulator investigates -- demonstrating consistent disclosure practices is the strongest compliance defense.

The Disclosure Document Is a Closing Tool: Counterintuitively, transparent disclosure often increases close rates. Merchants respect brokers who lay out the full cost plainly. It differentiates you from competitors who obscure costs with jargon. Frame the disclosure as "here is exactly what this costs -- no hidden fees, no surprises." Trust closes deals.

Frequently Asked Questions

Generally no. TILA applies to consumer credit, and MCAs are commercial transactions structured as purchases of future receivables. However, state-level laws (CA, NY, VA, UT, CT) impose TILA-like disclosure obligations for commercial financing. Federal TILA may eventually be extended to commercial transactions.

All costs imposed by the funder as a condition of financing: the factor rate markup, origination fees, processing fees, wire fees, underwriting fees, and UCC filing fees. Do not include third-party costs that the merchant would pay regardless (credit report fees if pulled independently).

Divide the finance charge by the amount financed to get the periodic rate, then annualize. For daily payments, multiply the daily periodic rate by 365. Most state disclosure laws specify the exact methodology. The result is an approximation because actual payback timing varies with revenue.

Results are estimates for educational purposes only. Actual amounts may vary based on your specific financial situation, market conditions, and other factors. This calculator does not constitute financial advice.