Merchant Cash Advance for a Small Business: Why and How

Are you struggling with cash-flow restrictions? Do you want to know how a merchant cash advance (MCA) can keep you away from such restrictions that hamper your growth? Just read below to know.

The Most Important About a Merchant Cash Advance

Sometimes, business owners need quick access to working capital, and approval takes a certain time. Well, what to do if your business doesn’t have time to wait? No worries! Just try an MCA. You can get an MCA in just a few days.

Did you know an MCA isn’t a loan? It’s simply a sale! You get an upfront sum of cash, and the provider gets some of your future credit/debit sales. The provider arranges with the credit/debit card companies to get a set percentage of your daily receipts. As a result, the provider pays back this amount.

An MCA is called to assist businesses getting their main revenue from credit card/debit card sales. So, an MCA is a good idea for a business with a high number of monthly transactions like restaurants, bars,and many B2B companies. Being able to project a steady flow of customers is a criterion to take into account.

MCA for Your Small Business

An MCA is a smart way to cover a large inventory purchase, buy equipment, expand your location, develop a new product/service, and more.

Let’s look at the benefits of an MCA:

  • Faster and simpler application than with other financial resources
  • MCA funds you very quickly
  • MCA istoo pliant and can serve a large variety of purposes
  • No significant impact on your credit
  • Convenient payback

What about some common risks?

  • Mostly,higher sales will mean higher APRs
  • No early repayment benefits
  • Federal regulatory bodies don’t keep the field under strict regulation
  • A lender may ultimately pull your credit during the application process
  • Using multiple MCAs can increase the cost burden
  • Comparing the cost to other financing options can be challenging

With all this being said, it’s critical to work with a reputable merchant cash advance provider such as a respectable alternative online lender that offers affordable, reliable, and secure MCAs.Increasingly, small businesses are using alternative finance platforms more often. As the Fed reports, the percentage of entrepreneurs who apply to alternative lenders first is on a steady rise.

Now, let’s draw a parallel between a small business loan and an MCA:

Small Business Loan:

  • Strict credit requirements
  • Lengthy funding times
  • Complicated contracts
  • Lots of paperwork


  • Below 500 approved
  • Funds available in 72 hours from application
  • Simple and flexible programs
  • Tax returns or financials aren’t required

If you’re a small retailer or running a restaurant, with a high volume of credit/debit card receipts and in need of business funding, an MCA is the best option for you. Not being able to qualify for a traditional bank line of credit, isn’t a problem for an MCA provider. No need to provide additional collateral or personal guarantees.

Author Bio: As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has made him a finance (or merchant cash advance) expert at First American Merchant.