Merchant Cash Advances
Our merchant cash advances provide you with an upfront lump sum of working capital. In exchange you repay the lump sum, plus a fee from a percentage of your business’s future credit card sales.
Applying is free and won’t affect your personal credit score.
Apply Online Today
You can apply online for an MCA in less than 5 minutes by filling out our online application form and you won’t be asked to provide lots of paperwork.
Same Day Funding
Get an instant pre-qualification decision when you apply. We aim to provide final approval and funding within 24 hours. Our average funding time: 1-3 days.
Bad Credit Accepted
MCA applications with bad credit are accepted. We can fund small business owners that have poor personal credit scores as low as FICO 550.
No Credit Check
No credit check is conducted when you apply for an MCA. A soft credit inquiry is carried out instead of a hard credit inquiry, so your credit won’t be affected.
At MCashAdvance, we offer merchant cash advance amounts between $5,000 and $900,000. We base approval on the strength of your business’s credit card sales.
There are no interest rate payments. Instead, you pay a flat fee called a factor rate, which ranges from 1.1 to 1.5. You repay the advance amount, plus the flat fee, from a percentage of your credit card receipts. This fixed percentage, known as the holdback percentage, ranges from 10% to 25%.
Repayment periods can last anywhere from three to eighteen months. When credit and debit card sales are high, you pay back the advance faster. If sales are on the lower side, paying back the advance will take a bit longer.
MCA Feature | MCA 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 |
Who Should Apply for an MCA?
Small business owners who need short-term financing and have consistent credit card sales should apply for a merchant cash advance. This alternative type of business financing is ideal for businesses that may not qualify for a short-term loan or a traditional bank loan but have steady revenue through credit card payments. Approval is based on the strength of your business’s credit card sales. So even if your business has no business credit history, no physical collateral, or less-than-perfect credit, you still have a very high chance of getting approved.
How to Get an MCA
To apply for a merchant cash advance online from MCashAdvance, follow these 4 easy steps.
Step 1. Apply
Online
Fill out our online application form. You only need to provide basic information about your business and its finances.
Step 2. Submit Documentation
Submit the last 3 months of your business bank statements. Or, your credit card processing statements.
Step 3. Let Us Review
Our underwriters will review your MCA application. If everything checks out, they’ll send you a funding offer.
Step 4. Receive Your MCA
Accept the funding offer, sign the contract and the funds will be deposited into your bank account in as little as 24 hours.
To learn about the application process with different merchant cash advance providers, read how to apply for an MCA.
How to Qualify for an MCA
To qualify for a merchant cash advance from MCashAdvance, there are a few key criteria that you need to meet.
Credit Requirements for an MCA
You can qualify for an MCA even with bad credit. Your FICO personal credit score or business credit score needs to be a minimum 550 or higher.
Financial Requirements for an MCA
Your business needs to have been operation for a minimum of 6 months. It must process credit card transactions of at least $7,500 per month. It must also have a valid business bank account number.
Documentation Needed for an MCA
You must submit three months of business bank statements. Or, you can submit three months of credit card processing statements.
Personal Requirements for an MCA
You may need to provide proof of personal identification. The ID must confirm that you are over 18 years old and either a US citizen or resident.
To find out what other merchant cash advance companies may ask for, read qualification requirements for an MCA.
Recent Businesses We’ve Funded with MCAs
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 merchant cash advance company 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 merchant cash 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 in as little as 24 hours. Average funding time 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.
Pros And Cons Of an MCA
Before you consider any alternative financing, like a merchant cash advance, you must weigh its pros and cons:
Pros
- Simple online application process
- Bad credit accepted
- No credit checks
- Lower eligibility requirements
- No psychical collateral required
- Same day funding available
- No restrictions on funds usage
For more Pros, read 20 benefits of an MCA.
Cons
- More expensive than loans
- Very high APR rates
- Daily repayments may hurt future cash flow
- Shorter repayment periods
- Won’t improve credit score
- Cash-only businesses are not eligible
- No early repayment benefit
For more Cons, read 10 drawbacks of an MCA.
What Can You Use MCAs for?
There are no restrictions on what you can use the MCAs 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 merchant cash advance will be the advance amount given, plus the factor rate fee the MCA provider charges you.
To calculate the true cost of a merchant cash advance, 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.
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% |
Why Are MCA Offers Sometimes Lower Than the Amount Requested?
The amount of cash the MCA provider offers you may be lower then the amount you request. This is because the MCA provider may feel giving you the full amount is too risky. They decide how much to offer based on the strength of your credit card sales, your credit history and business history. Providers usually offer 50% to 250% of your credit sales.
How are MCA Applications Evaluated?
First, our fintech software checks if you pre-qualify for a merchant cash advance. 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 check your business’s cash flow. They look for red flags like too many NSFs, negative overdrafts, or other debts. After that, they do a soft inquiry to view your personal and business credit scores. This won’t affect your credit.
They will use this information to decide to offer you funding. They will also use it to determine how much they will charge (factor rate fee) to provide you with the advance.
For a more detailed breakdown of the evaluation process read MCA underwriting
How to Repay an MCA?
Repaying a merchant cash advance is a straightforward process. The MCA provider included a clause in your MCA contract. It allows them to carry out automatic deductions. They handle everything related to repayment deductions, from start to finish.
Most MCA providers use Split Withholding Repayments. They deduct money from your daily credit card transactions. Some may prefer ACH Withdrawal Repayments. They deduct fixed amounts from your bank account weekly or monthly.
Others might ask you to process all your card transactions through a separate bank account. They then transfer your share of the sales from that bank account into your bank account at the end of each day. They keep the percentage owed to repay the MCA. This method is called Lockbox or Bank Account Withholding Repayments.
To learn more about the repayment process, read how to repay an MCA.
The Difference Between MCAs and Business Loans
Loan Features Comparison | Merchant Cash Advances | Bank Loans | SBA Loans |
---|---|---|---|
Funding Amounts | $5,000-$900,000 | $100,000 | Credit dependent. |
Application Process | Short online application process with same day approval and no paperwork. | Long application process with lots of paperwork. | Long application process with lots of paperwork like business plans. |
Bad Credit Accepted | Yes | No | No |
Hard Credit Check | No | Yes | Yes |
Approval Time | In as little as 24 hours. | Takes weeks. | Takes weeks. |
Time to Funding | Same day funding. | 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%) |
The table shows the differences between merchant cash advances and traditional business loans. To learn the key differences between MCAS and other business financing options, like business lines of credit, invoice financing, equipment financing read the top 10 alternatives to merchant cash advances.
Is MCA Funding Right for Your Business?
MCA funding can be a good funding option if your business has high credit card sales, needs quick access to funding, but might not qualify for traditional bank funding.
However, merchant cash advances come with high rates and fees.
Before you commit to an MCA or any alternative financing that offers bad credit business loans, make sure it’s a financially sound choice for your business. This will keep your business from falling into a debt cycle.
To get better terms than an MCA, improve your credit score, offer collateral, or get a co-signer. Then, apply for traditional financing, like a business loan that has lower rates.
Frequently Asked Questions
Yes, we offer same day funding. You’ll get an instant pre-qualify decision when you apply. We aim to provide final approval and funding within 24 hours. Our average funding time is 1-3 days. To speed up the approval process and funding time, have your last 3 months’ business bank statements ready after applying. Also, ensure you’re available for a call at the provided number if needed.
Bad credit merchant cash advance applications are accepted. We fund small business owners that have poor credit scores as low as FICO 550.
No credit check is conducted when you apply for a merchant cash advance. A soft credit inquiry is carried out instead of a hard credit inquiry, so your credit won’t be affected.
An MCA loan, also known as a merchant cash advance, is not a traditional loan. It’s an advance on a business’s future credit card sales.
No. MCA providers do not report to credit bureaus. So, your MCA or your repayment history will not appear on your credit report. To understand more about credit reporting and credit checks for 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. It can also involve filing a lawsuit to get the debt back. Read more about the consequences of defaulting on an MCA and how to avoid it.
A business cash advance, also known as a merchant cash advance, advances cash to businesses in return for a portion of their future credit card sales.
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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