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Accelerate Your Business Growth with Quick Merchant Cash Advances

Learn how MCA funding can get your business flexible funding that offers repayments based on your real sales volume. Cash advances are a useful financial option for businesses that need fast financing or are experiencing cash flow disruptions. This funding gives a company access to their future sales or receivables. Learn more below.


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What is an MCA

A merchant cash advance is a type of financing where a business gets a lump sum capital in exchange for a percentage of its future sales, like credit card or debit card transactions, or daily bank deposits. As the approval process is shorter than that of conventional loans, this form of alternative financing is well-suited for businesses with steady revenue that may not meet credit score requirements.

It is important to remember that a merchant cash advance (MCA) is not a loan. It's a commercial agreement where the business owner sells their future credit card sales or other business receipts to the MCA funding provider. The repayment or the percentage of future sales adjusts based on a business's sales and this makes an MCA advance ideal for periods where revenue is not steady. So, whether you're seeking small cash advances or larger amounts, this method ensures payments remain manageable during slow seasons.



Quick Facts about Merchant Cash Advance

  • Who benefits most from a merchant cash advance?

    Any business that processes consistent credit or debit card transactions is a perfect candidate for an MCA advance. Even if your revenue fluctuates but you receive steady card payments every month, in those circumstances too, an MCA could be the right fit. Retail stores and restaurants are some of the most common types of businesses that use a merchant cash advance.

  • When should you apply for a merchant cash advance?

    As an MCA tends to cost more in the long run, it should be used only in times of urgent cash need and when the business owner has a reasonable expectation steady business income.

  • What are the qualification criteria for a merchant cash advance?

    Most businesses who qualify for an MCA usually have:

    • Credit Score: 525-550
    • Annual Revenue: $150,000-$200,000
    • Time in Business: 18-24 months minimum

  • What are the documents required to apply for an MCA advance?

    If you are planning to apply for a merchant cash advance, you will need the following documents:

    • Credit Card Processing Statements
    • Driver's License
    • Voided Business Check
    • Bank Statements
    • Credit Score
    • Business Tax Returns

Is a Merchant Cash Advance Right for Your Business?

One of the perks of an MCA is that it gives fast access to capital and its repayment adjusts as per your business’s revenue. This aspect of a merchant cash advance helps in easing the burden during slow revenue months. However, while an MCA is ideal for urgent cash needs, it is important to understand the true cost of securing this type of financing to avoid a cash flow strain and a cycle of dependency.

Benefits of Small Cash Advances with MCA

  • Fast Funding:

    With an MCA advance, funds can be in your account quickly, making it ideal for urgent needs.

  • Flexible Repayment:

    Payments are tied to your sales, so during slower periods, your repayment adjusts.

  • Easy Qualification:

    Even businesses with lower credit scores or a shorter operating history can qualify for a merchant cash advance.

Keep in Mind

  • High Costs:

    MCA advances often come with higher fees or factor rates, leading to a more expensive form of borrowing compared to traditional loans.

  • Frequent Payments:

    Daily or weekly repayments can strain cash flow if not carefully planned.

  • Risk of Dependency:

    Businesses relying heavily on small cash advances may fall into a cycle of borrowing.

  • Complicated MCA Contracts:

    While there is relatively little paperwork, MCA contracts are complicated. In all cases, we recommend that the merchant carefully review any MCA agreement with an attorney.

Merchant Cash Advance

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FAQs for Merchant Cash Advance

What happens if you default on a merchant cash advance?

Defaulting on a merchant cash advance (MCA) can adversely affect your finances. The lender can collect a part of your daily credit card sales or even bank deposits until the balance is paid. You can also face legal actions, or your credit score can be negatively impacted. Moreover, additional penalties will be levied for defaulting, increasing the overall amount and making it harder to repay. If you’re struggling with payment, ensure you communicate with the lender as soon as possible so that you can figure out a mutually beneficial way out of the situation.

How to get out of a merchant cash advance?

If you are struggling with payment of a merchant cash advance, you can try to renegotiate better terms with your lender or even consolidate your debt with a lower-interest business loan. Some businesses try to increase their sales efforts to accelerate their repayment. But the bottom line is to act swiftly before matters get worse.

How does a merchant cash advance work?

Unlike a traditional loan, a merchant cash advance is a flexible financing option that provides a lump sum capital upfront in exchange for a percentage of your daily credit card sales or bank deposits. The repayments adjust according to your business’s revenue is very handy because you pay less on lean revenue days. The debt is repaid over time, with the lender collecting a daily cut until the overall cost of the advance is paid off. But, keep in mind that the flexibility comes with higher costs and only businesses that can handle the daily payments should opt for this type of financing.

Are merchant cash advances a good idea?

A merchant cash advance is a good option for businesses looking for urgent capital without the hassle of traditional loan bureaucracy. But it comes with higher fees, as compared to other business loans. So, it can become very expensive if your business doesn’t generate enough revenue to handle the repayment. Only businesses with steady credit card sales should opt for it to avoid any further financial burden.

How does an MCA work?

With an MCA or a merchant cash advance, lenders provide a large sum of money upfront for a percentage of your daily credit card sales. As the repayment is linked to your sales/revenue, it gets adjusted based on your business’s revenue. So, on slow days, you pay less and on high sales days, you pay more. This aspect of an MCA comes in handy if your business has fluctuating revenue. But the flexibility comes at a cost—in the form of high interest, as compared to traditional loans.

What is the difference between a loan and a merchant cash advance?

A loan and a merchant cash advance can both be different types of debts. The only difference between the two is how they are repaid. While a loan (persona or business) usually has a fixed monthly installment that is paid for a fixed duration, a merchant cash advance takes a portion of your daily credit card sales. This means that payments fluctuate with your daily sales revenue. Loans can take time to process and disburse, whereas MCAs are faster to obtain and don’t require stringent qualifications to get approved. But a merchant cash advance has a higher cost than traditional loans.

Can a merchant cash advance hurt your credit?

Like any business financing, a merchant cash advance can negatively impact your credit if you fail to make the payments or meet agreed-upon payments. Your lenders can report defaults to business credit bureaus, which might hurt your chances of taking loans in the future. You can also face legal action in case of default.

Term Loans are made by Itria Ventures LLC or Cross River Bank, Member FDIC.