Merchant Cash Advances
Get an upfront lump sum of capital to keep your business moving forward. Repay it automatically with a percentage of your daily credit card sales.
Applying is free and won’t affect your credit score.
Apply Online
Fill out a short online application. You don’t need to provide any paperwork or collateral.
Same Day Funding
Same day MCA funding is available, with an average funding time of 1 to 3 days.
Bad Credit Accepted
We accept bad credit applications for credit scores as low as FICO 550.
No Credit Check
We conduct soft credit inquiries to ensure that your credit score will not be affected.
MCashAdvance is a business cash advance company. We offer merchant cash advances (sometimes called MCA loans or MCA funding) to businesses, like yours.
We offer lump sum advance amounts between $5,000 and $900,000. Approval is based on the strength of your daily credit card sales.
There are no ongoing interest rate payments. Just a simple flat fee called a factor rate, which ranges from 1.1 to 1.5.
You repay your business cash advance with a fixed percentage (10% to 25%). It’s called the holdback. The holdback is taken from your credit card receipts each day.
You repay your business cash advance with a fixed percentage (10% to 25%). It’s called the holdback. The holdback is taken from your credit card receipts each day. Business cash advances are structured to be repaid typically within 3-18 months.
MCA Feature | Offer Details |
---|---|
MCA Amounts: | $5,000 – $900,000 |
Factor Rate: | 1.1 – 1.5 |
Holdback | 10 – 25% |
Repay In: | 3 – 18 months |
Funding Time: | 1 – 3 days |
How To Get a Business Cash Advance?
To get a merchant cash advance from MCashAdvance complete these 4 easy steps:
1. Complete the Online Application
Enter basic financial and business information to see if you pre-qualify for an MCA.
2. Submit Your Documentation
Upload and submit your business’s bank account statements for the previous 3 months for review.
3. Get a Funding Offer
An underwriter will review your application. If everything checks out, they’ll send you a funding offer.
4. Receive Your MCA Funding
Accept the funding offer. Sign the contract. The funds will be deposited into your bank account.
To get more guidance on applying to MCA providers, read how to apply for an MCA.
Business Cash Advance Requirements
To qualify for a merchant cash advance from MCashAdvance, you must meet these 5 requirements:
- 6+ months in business
- $7,500+ a month in credit card sales
- 550 minimum credit score (FICO)
- Have an active business bank account
- US citizen or resident over 18 years of age
To find out the most common requirements that MCA providers ask for, read qualification requirements for an MCA.
We’ve Helped Thousands of Businesses
We fund small businesses in all 50 states in the USA. We give them fast access to the working capital they need to keep succeeding.
Who Should Apply for a Business Cash Advance?
MCAs are good for businesses that need funding but don’t qualify for traditional loans. Businesses that process many credit card transactions every day should apply for a merchant cash advance. This is because approval is based on the strength of your monthly credit card sales. Even if your business is new, has bad credit, lacks collateral, or has cash flow problems, you can still apply for an MCA.
Merchant Cash Advances Explained
What is an MCA?
A merchant cash advance (MCA) is an alternative type of financing for businesses that need fast access to working capital. It’s not like a traditional business loan; the lender does not loan money to you, and there is no interest charged. Instead, a merchant cash advance provider gives you an upfront lump sum of cash. You agree to pay back the lump sum plus a fixed fee from future sales revenue from credit card sales.
How Does an MCA Work?
You and the MCA provider agree on how much cash you’ll receive (the advance amount). The MCA provider will offer a fee, called the factor rate. This rate is the fee they want to charge you for the advance. They will also say how much of your daily credit card sales they will take each day, called the holdback. You’ll find all these details written down in the MCA agreement.
After you sign the agreement, the MCA provider will deposit the money into your business bank account. This usually takes 1-3 days. You can start using this money right away for anything you need in your business. You don’t have to tell the MCA provider what you’re spending the money on.
The MCA provider then sets up automatic deductions to take a portion of your daily credit card sales. This could start as soon as the day after the money shows up in your bank account. These automatic deductions continue every day. They continue until you’ve paid back the entire advance plus the fee.
What Can You Use MCA Funding For?
There are no restrictions on what you can use the MCA funding for in your business. Most business owners use the MCA they receive to help with short-term expenses and purchases.
The 5 most common uses are:
- Supporting cash flow
- Working capital
- Cover unforeseen expenses
- Purchase Inventory
- Equipment Purchases
For a more detailed list of what you can use MCAs for in business, read uses of MCAs
How Much Will an MCA Cost?
The total cost of your MCA will be the advance amount given, plus the factor rate fee the MCA provider charges you.
To calculate the true cost of an MCA, multiply the advance amount by the factor rate. For example, if you receive a $20,000 MCA with a factor rate of 1.2, you will owe $24,000 ($20,000 x 1.2).
Most MCA providers and lenders charge a flat factor rate fee. But, some brokers and lenders may add extra fees, like origination, processing, and early repayment fees. So, it’s important to confirm with your provider that there are no hidden charges before finalizing any agreement. At MCashAdvance, we do not charge any hidden fees.
MCA Example
Imagine your business makes $25,000 each month from credit and debit card sales. You need quick cash for some expenses, so you apply for a $20,000 merchant cash advance (MCA).
The MCA provider evaluates your credit card sales and business’s credit risk. They offer the $20,000 at a 1.2 factor rate with a 15% holdback each day.
This means the $20,000 MCA will cost you ($20,000 x 1.2) = $24,000 in total. From your average monthly credit card sales of $25,000, the provider will hold back 15% each day ($25,000 x 0.15 / 30) = $125 per day.
At an average of $125 a day, it’ll take around 192 days, or 6.4 months, to repay the $24,000.
Repayment time varies with your daily sales. More sales mean quicker repayment: fewer sales mean slower. The 15% deduction remains constant.
Use this MCA calculator to get an idea of what an MCA might cost you, based on what you’re looking for.
Details | MCA Example |
---|---|
Advance Amount | $20,000 |
Factor Rate | 1.2 |
Holdback | $125 per day (15% of daily credit card sales) |
Estimated Repayment Period | 6.4 months |
Total Pay Back | $24,000 |
Estimated APR | 71.17% |
Pros And Cons Of MCAs
Before you consider any type of alternative financing, including an MCA, it’s essential to weigh both the advantages and disadvantages:
Pros
- Simple application process
- Quick decisions
- Lower eligibility requirements
- No collateral required
- Fast funding
- No restrictions on funds usage
For more Pros, read 20 benefits of an MCA.
Cons
- More expensive than loans
- Daily repayments may hurt future cash flow
- Shorter repayment schedule
- Won’t improve credit score
- Cash-only businesses are not eligible
- No early repayment benefit
For more Cons, read 10 drawbacks of an MCA.
Why Are MCA Offers Sometimes Lower Than the Amount Requested?
When you request a specific advance amount from an MCA provider, the amount offered might be lower due to your business’s risk profile, your monthly credit card sales, and your repayment capacity. Providers typically offer 50% to 250% of your credit sales, adjusting for potential risks and their own policies to ensure you can pay back the advance comfortably.
How are MCA Applications Evaluated?
First, our fintech software checks if you pre-qualify for an MCA. Then, one of the underwriters at MCashAdvance reviews your application and supporting documents. The underwriter starts by checking the strength of your monthly credit card sales. Next, they review your bank statements to verify your business’s cash flow and look for any red flags like too many NSFs, negative balance overdrafts, or other debt obligations. After that, they complete a soft inquiry to look at your personal and business credit scores, so your credit won’t be affected. They will use this information to decide to offer you funding and determine how much they will charge (factor rate fee) to provide you with the advance based on this business’s risk profile.
For a more detailed breakdown of the evaluation process read MCA underwriting.
How to Repay an MCA?
Repaying your MCA is a straightforward process. The MCA provider simply needs your consent, which is included in your MCA agreement, to carry out the deductions. They handle everything related to deductions, from start to finish.
Most MCA providers use Split Withholding Repayments, where they deduct money from your daily credit card transactions. Some may prefer ACH Withdrawal Repayments, which deduct fixed amounts from your bank account regularly. Others may ask you to process card transactions through a separate bank account, transferring your share of sales to your bank account at the end of each day, known as Lock Box or Bank Account Withholding Repayments.
To learn more about the repayment process, read how to repay an MCA.
The Difference Between MCAs and Loans
Loan Features Comparison | Merchant Cash Advances | Bank Loans | SBA Loans |
---|---|---|---|
Funding Amounts | $5,000-$900,000 | $100,000 | Credit dependent. |
Application Process | Pre-qualify in seconds, same-day funding, no hard credit check, no paperwork. | Long application process, hard credit check, lots of paperwork. | Long application, credit check, lots of paperwork like business plans. |
Approval Time | Less than 2 hours. | Takes weeks. | Takes weeks. |
Time to Funding | Same-day funding, 1-3 day average. | 1-3 Months. | 1-3 Months. |
Approval Criteria | Credit Card Sales. | Credit score and collateral. | Credit score and collateral. |
Borrowing Costs | High (15% to 50%) | Low (6% to 12% ) | Low (11% to 15%) |
Now that the table above has highlighted the key differences between MCAs and regular business loans, you might be also wondering how other types of business financing, like business lines of credit, invoice factoring, and equipment financing, stack up against MCAs. To learn more, check out a guide on the top 10 alternatives to merchant cash advances.
Is MCA Funding Right for Your Business?
Merchant cash advances provide faster and easier access to capital than traditional lenders, but they carry higher rates and fees.
Before you commit to an MCA or any type of alternative financing that offers bad credit business loans, make sure it’s a financially sound choice for your business to avoid falling into a debt cycle.
If you’re not in a rush for funding, taking steps to improve your credit score, offering collateral, or finding a co-signer for your business loan can greatly improve the likelihood of securing terms more favorable than those MCAs usually offer.
Frequently Asked Questions
No, an MCA is not classified as traditional small-business loan. MCA providers do not lend you money. Instead, they are giving you a cash advance on your future credit card sales and charging a fee to provide that financial facility to you.
Yes. You can get an MCA with a low credit score. Many MCA providers require a FICO score of 550 or more. FICO Scores between 300-579 are considered ‘bad’ or ‘poor’. With bad credit, expect to pay higher rates to offset the MCA provider risk.
No. MCA providers do not report to credit bureaus, so your MCA or your repayment history will not appear and your credit report. To understand more about how credit reporting and credit checks operate in the context of MCAs, you can read MCA credit reporting.
If you default on an MCA, the MCA provider has the right to secure the remainder of debt. This can involve sending the debt to a collections agency and ultimately filing a lawsuit to recoup the debt. Read more about the consequences of defaulting on an MCA and how to avoid it.
A business cash advance is just another term used for a merchant cash advance. A business cash advance is also sometimes referred to as a revenue loan, a turnover loan, or revenue-based financing.
Yes, an MCA is a type of unsecured financing, so you don’t need to offer assets or collateral to secure the funding. However, some MCA providers may request a personal guarantee. This means if your business fails to repay the advance, you would be personally responsible for the debt.
No. Traditional banks and conventional lenders do not offer MCA financing.
The length of time it takes to repay a merchant cash advance in full depends on how much revenue is generated each day through credit and debit card purchases. The higher the amount each day, the faster the cash advance will be repaid. The average length of time it takes is between three to eighteen months.
Funds from an MCA are not taxed when received. However, you will need to pay taxes on the revenue you generate that is used to repay the MCA. This is because the MCA is an advance on your future revenue. The rates and fees may also have different tax implications. For a detailed breakdown, read MCA taxation guidelines.
Yes, it is possible to refinance an MCA. You can either approach your current MCA provider for refinancing options or consult a different lender and secure financial instruments, like a term loan, to settle the MCA balance. Read refinancing an MCA to know your options and the key steps to take.
Can startups get an MCA? Yes. Startups can qualify for MCAs provided they meet the minimum qualification. Read MCAs for startups to confirm if your startup qualifies.
Can Multiple MCAs be Consolidated? Yes. Your MCA provider may be willing to roll multiple MCAs into a single new cash advance. You also have to option to approach a lender that offers consolidation loans to pay off your existing MCA debts.
While MCAs become popular during the 2008-09 financial crisis when it was difficult to secure credit from traditional lenders, the origin of MCAs date back to the 1990s. Read the history of the MCA industry to learn more.
It depends. Some MCA providers incorporate clauses in their agreements requiring you to provide a personal guarantee, making you directly responsible should the business fail to repay. It’s essential to review your agreement carefully before committing. Read more about MCA personal guarantees to understand what they are and how they work in more detail.
If your business cannot qualify for a traditional business loan, MCA Financing might be a good alternative during a cash flow crisis. But you should use all types of high-interest-rate financing, including MCAs, as a last resort.
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