--- title: Analyzing The Potential ROI Of A Business Cash Advance description: A business cash advance is an investment in of itself. This type of funding allows you to spend your funding on anything you need to improve your business, image: https://www.quikstonecapital.com/hubfs/analytics-3265840_640-1.jpg --- [![Merchant Cash Advance](https://www.quikstonecapital.com/hs-fs/hubfs/_Website/Logos/Web-Combo-11.png?width=200&name=Web-Combo-11.png "Merchant Cash Advance")](https://www.quikstonecapital.com/) [![Merchant Cash Advances](https://www.quikstonecapital.com/hs-fs/hubfs/_Website/Logos/Web-Color2.png?width=738&name=Web-Color2.png "Merchant Cash Advances")](https://www.quikstonecapital.com/) # Merchant Cash Advance Blog # Analyzing The Potential ROI Of A Business Cash Advance Posted by [Karen Erdelac](https://www.quikstonecapital.com/merchant-cash-advance-blog/author/karen-erdelac) on Mar 12, 2021 - [Tweet](https://twitter.com/share) ![analytics-3265840_640-1](https://www.quikstonecapital.com/hs-fs/hubfs/analytics-3265840_640-1.jpg?width=737&name=analytics-3265840_640-1.jpg)A business cash advance is an investment in and of itself. This type of funding allows you to spend your funding on anything you need to improve your business, but it is always a good idea to have a clear plan. Making investments that provide your business an opportunity to grow and ultimately increase your profitability is necessary in order to remain competitive as a small business. ### What Is ROI? - [Return on Investment](https://www.investopedia.com/terms/r/returnoninvestment.asp) (ROI) is a popular profitability metric used to evaluate how well an investment has performed. - ROI is expressed as a percentage, and is calculated by dividing an investment's net profit (or loss) by its initial cost or outlay. - ROI can be used to make apples-to-apples comparisons and rank investments in different projects or assets. ### How To Calculate ROI For businesses like restaurants, liquor stores, auto repair and retail shops it can be difficult to analyze your numbers since they can change dramatically over the course of time. Using the cash flow method can help these businesses better understand their returns. - Get a spreadsheet, excel will do. - Lay out along a single row a number of years. - In the first year show the total investment required as a negative number - In the first through tenth years, show the returns to the investors. This should be a positive number. - Then add those two rows together to get a "net cash flow" number. - Sum up the totals of all ten years to get total money in, total money back, and net profit. - Then calculate two numbers. The "multiple" is the total money back divided by the total money in. And then using the "IRR" function, calculate an annual return number. In many cases it will be a good idea to consult an accountant to ensure you’re getting things right. ### ROI Of A Business Cash Advance To effectively analyze the return on investment that a business cash advance is expected to yield, you just need: - The total cost of the cash advance - The additional weekly revenue that you anticipate to earn - Your net revenue To make this simple, Quikstone Capital has created a [Business Cash Advance and ROI Calculator](https://www.quikstonecapital.com/cash-advance-and-roi-calculators) to help you determine the amount of funding you may qualify for and what your potential ROI from that investment will be. If you have a large project in mind you can schedule a time to talk to a Quikstone Capital Solutions team member! We have a wide variety of experience with projects that can grow your business and increase sales. 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