Merchant Cash Advance

Use your business’s future sales for a quick merchant cash advance.

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Are you a small business owner who is looking for an alternative to traditional bank loans? If so, then you may consider a merchant cash advance same day funding. MCAs provide small businesses with the funds they need in order to help them grow their business.

What is a Merchant Cash Advance?

A merchant cash advance pays a firm upfront cash and extracts payments from the credit card revenues on a regular (typically daily) basis according to an agreed-upon amount. This type of financing is popular among small businesses because it doesn't require the business to put up any collateral and the approval process is typically much faster than traditional loans from banks. This might also be a good choice for firms that have a high number of credit card transactions, need money urgently, or may not qualify for a standard loan.

An MCA provides businesses with an upfront sum of cash that's repaid using a percentage of their debit and credit card sales, plus a fee. One of the biggest benefits of this type of loan is that it is flexible and businesses can use the funds they need without having to make set monthly payments like with other types of loans. However, they often come with high annual percentage rates (APRs), which can make them costly in the long run. MCA loans can be used for many things, like working capital, buying inventory, financing equipment, and more.

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Who Are a Merchant Cash Advance For?

A bank loan may not be available for all of a small business's desired expenditures. Businesses that want to improve their competitiveness and overall functionality will benefit most from a merchant cash advance. You should use the MCA when you are just starting off and wish to make non-disruptive improvements.

An MCA is not a good option for a company that has suffered a significant tragedy and is unable to conduct business. But getting a loan from a regular bank is better than an MCA because you don't have to keep doing day-to-day business to pay it back.

How Can a Business Apply For a Merchant Cash Advance?

To apply for a merchant cash advance, a business needs to find a merchant cash advance company. And in the process, the last four to six months of bank statements or receivables are required along with other basic information at the time of filling out the online request form. A lot of lenders will not ask for your credit score or any other collateral as a condition for approving your loan application.

After completing the request form, you will most likely receive a response on funding within 24 hours. Once the application is approved, the business will receive the cash they need within a few days.

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What Is the Cost of a Merchant Cash Advance?

There are a lot of variables that will affect the total cost of your MCA, including the MCA provider, the terms you agree to, and the state in which you live. The factor rate, which is simply a multiplier of the advance's principal, is what determines the interest rates on business cash advances. Suppose a firm gets granted $100,000 with a factor rate of 1.5. This means it will have to pay back $150,000 (100,000 x 1.5) in interest. In this case, the advance conditions would dictate the daily payment. Higher revenue statistics might place the applicant in a better position to qualify for a reduced factor rate.

What Are the Pros and Cons of Merchant Cash Advances?

Let's take a closer look at some of the key benefits and drawbacks of this type of financing:


  • An online application might really expedite the delivery of cash to a firm within hours.
  • There is no need to fill out, fax, scan, or submit a long application form.
  • A percentage of sales rather than a fixed monthly payment may work in the firm's favor if sales are slow in the beginning.
  • A cash advance for business with no collateral leads to high acceptance rates.
  • Merchant Cash Advances (MCAs) don't have to consider weak credit ratings because small businesses bear the ups and downs in the economy.
  • A Cash advance for business is far more likely to be authorized if your business is doing well financially and your business's past credit card sales are good.


  • Compared to traditional bank loans, MCA can be more expensive in the long run because of the higher factor rates.
  • If you pay back the advance before the end of the term, your effective APR goes up because the interest isn't spread out over the term.
  • Some MCA providers charge additional administration costs in addition to their exorbitant factor rates.

How to Be Eligible For a Merchant Cash Advance?

Before you apply for an MCA, it is important to understand the following eligibility requirements.

  • You must have been in business for at least six months to ensure that you have a steady income and are able to repay the loan.
  • You will also need to have a credit card terminal or processing account because MCAs are typically repaid with a percentage of your business’s daily sales.
  • Your personal credit rating is also important to most lenders to decide the interest rate for you. With a higher credit score, you will be charged a reduced interest rate.

How Do Merchant Cash Advance Repayment Work?

Merchant cash advance repayment works by borrowers agreeing to a set percentage of their future credit card sales as repayment. This percentage is usually agreed upon before the business cash advance is given. The repayment schedule is usually worked out so that the full amount is paid back within a certain number of months. If the borrower's credit card sales exceed the agreed-upon percentage, the borrowed amount is paid back sooner. If the borrower's credit card sales fall short of the agreed-upon percentage, the repayment schedule may be extended.

Do Your Business Need a Merchant Cash Advance?

An MCA is not, however, always suitable for everyone. It is an alternative for businesses that require immediate access to finance, have sufficient daily cash flow from their merchant account, and can handle the potentially high fee. This is also an alternative for businesses that use credit cards often but don't have a strong credit history because the credit standards are less stringent.

Using MCAs can help organizations that want operating capital but do not meet the requirements for a regular loan. In particular, they are beneficial if you have a short-term financial gap and don't wish to commit to a long-term loan term.

What Are the Alternatives to a Merchant Cash Advance?

Merchant cash advance same-day funding may not be an option for your business for any number of reasons. However, some other financing choices are available if you don't want to face the risk of an MCA.

A high-risk merchant account is an option that many businesses turn to when they are unable to obtain standard bank funding. Cash advances, invoice factoring, and standard installment loans are also a few of the options that are available for small businesses in the market. There is a demand for these services, as many enterprises are considered "high risk" and are frequently denied access to a conventional MCA.

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