MCA Basics
Understanding the fundamentals of merchant cash advances
Understanding MCAs
What is a Merchant Cash Advance?
A Merchant Cash Advance (MCA) is a flexible business financing solution where a company receives a lump sum payment in exchange for a portion of its future sales. Unlike traditional loans, MCAs are considered a purchase of future receivables.
Key Features
- Fast Funding
Receive funding within 24-48 hours after approval, compared to weeks or months for traditional loans.
- Revenue-Based Repayment
Repayments are typically a percentage of daily sales, making them more manageable during slower periods.
- Simple Qualification
Focus on business performance rather than credit score, making approval easier for many businesses.
How MCAs Work
- Application
Submit basic business information and recent bank statements or processing statements.
- Approval
Quick underwriting process focusing on business performance and cash flow.
- Funding
Receive funds quickly, often within 1-2 business days after approval.
- Repayment
Automatic deductions from daily sales or fixed ACH payments until the advance is repaid.