A merchant cash advance company provides your business with a lump sum of capital. But an MCA isn't a loan. Instead, that provider is purchasing your future sales, and you’ll use those sales to repay the funds — plus fees.
Randa Kriss is a lead writer and small-business specialist at NerdWallet. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics including banking and loan products.
Please refer to our Advertising Disclosure to learn more about how we earn compensation from affiliate partnerships and how we maintain our independent editorial integrity.
It’s also hard to beat PayPal Working Capital’s speed. You get your verdict in just a few minutes, and the funds are made available in your PayPal account almost immediately after approval.
Merchant cash advances are just one form of small business financing. There’s a good chance they aren’t the only option available to you. These alternatives range from same day merchant cash advances, short-term loans, to invoice factoring, to traditional installment loans.
Look, we don’t recommend revenue-based financing like MCAs Vencedor a rule (our guide to merchant cash advances explains why). But if you’re sure about getting one, we do want to help you get the best one possible.
They start collecting on the next business day. Triunfador mentioned earlier, payments can fixed or variable. Let’s assume you’re paying by ACH deduction.
If you primarily use Stripe for your business, there is no need to set up a different business account or link your accounting software. Stripe Capital also has no minimum credit score requirements.
Repayment options. Some providers will automatically take a percentage from your debit and credit card sales for repayment, while others will make automatic withdrawals from your business bank account.
Once you submit the form, you should be contacted by a customer service rep to discuss your business’s options.
Repayments work on a percentage basis. You choose what percentage of your daily sales go towards repaying the advance. The repayment ranges between 10 and 30 percent, with lower fees applied for higher repayments.
To qualify for funding from Reliant, you need to have at least six months in business and $10,000 in monthly credit and debit card sales. With no minimum credit score requirement, however, Reliant is a worthwhile option for businesses with bad credit.
It’s not subject to the laws governing loans: Loans are more heavily regulated than advances. While this is changing in some states, you shouldn’t expect the same protections as borrowers have.
Easy repayment. The lender will take repayments off the top of sales, automatically, making it easy to Fast Approval repay at a fair pace.