Merchant Cash Advance FAQ

A Merchant Cash Advance (MCA) is an alternative financing solution that provides businesses with a lump sum payment in exchange for a percentage of their future credit card or debit sales. It is not a traditional loan, but rather a sales-based cash advance designed specifically for businesses that process frequent card payments.

An MCA provider advances funds to your business based on your projected credit and debit card sales. Repayments are made daily or weekly by automatically deducting an agreed-upon percentage of your sales directly from your merchant account until the advance is fully paid back.

Typically, businesses that regularly accept card payments and have a stable history of revenue qualify for an MCA. Qualification criteria are less stringent compared to traditional loans, focusing more on sales performance rather than credit scores or collateral.

Funds from an MCA can often be received within 24-72 hours, making it ideal for businesses needing rapid access to capital.

No. One significant advantage of an MCA is that approval primarily depends on your business’s sales volume and revenue consistency, not your personal or business credit score.

Generally, there are no restrictions. Businesses commonly use MCAs for inventory purchases, equipment upgrades, payroll, marketing expenses, expansion, or bridging short-term cash flow gaps.

Repayments are flexible, automatically adjusting to your business's sales volume. During slower periods, your repayment amount decreases proportionally since it’s based on a fixed percentage of sales.

Funders determine your factor rate based on key business performance indicators, including monthly revenue, credit card volume, time in business, industry risk, average transaction size, credit history, sales consistency, and seasonality. MCA rates are ultimately calculated from the combination of these risk factors.