Truth-in-Lending Calculator
Generate TILA-style disclosure metrics for commercial financing transactions.
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
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.
Run These Numbers Too
APR Disclosure Calculator
Convert MCA factor rates to APR, simple interest rate, and finance charge for state compliance disclosures.
Fee Disclosure Generator
Calculate all fees on an MCA deal and generate a merchant-facing disclosure breakdown.
Usury Rate Checker
Check whether a financing rate exceeds state usury limits for the applicable loan type.
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