A Merchant Cash Advance Is Not a Loan — It Is a Purchase of Your Future Sales
What Is a Merchant Cash Advance?
A Merchant Cash Advance (MCA) is a purchase of your future credit card and debit card revenue at a discount. You receive a lump sum upfront and repay via a fixed percentage of your daily card sales — called the holdback rate. No fixed monthly payment. When sales are strong, payoff comes faster. When sales slow, daily repayment slows automatically.
- Repayment is a daily percentage of card sales — not a fixed monthly payment
- Slow sales = slower repayment. Strong sales = faster payoff
- No collateral required — approval based on card revenue history
- Credit score matters less than consistent card processing volume
- Funding typically within 1–3 business days of approval
- Terms typically 3–18 months based on sales velocity
- Best for restaurants, retail, salons, and high card-volume businesses
How Factor Rates Work — Real Example
MCA Example
If sales increase, payoff comes faster. If sales slow, it takes longer. The total cost does not change — only the timeline.
When MCA Makes Sense — And When It Doesn't
MCA is fast and flexible but typically more expensive than term loans or SBA loans. We will always show you the lowest-cost option you qualify for first. MCA makes sense when:
- You need capital in 24–72 hours and cannot wait for traditional financing
- Your business has strong card revenue but credit challenges
- You are a startup that doesn't yet qualify for SBA or term loans
- You need a bridge while longer-term financing is being arranged
- A seasonal cash flow spike requires quick capital to capitalize on
Our policy: If an SBA loan or term loan works for your situation and you qualify, we tell you. We do not push MCA when a lower-cost option exists.