How Does a Merchant Cash Advance Work?

If you’re a small business owner in need of quick cash, you’ve probably heard of merchant cash advances (MCAs). While the name sounds complex, the concept is simple: it’s funding based on your future sales, typically from credit card transactions. It’s not a loan—it’s an advance on expected revenue.

An MCA provides businesses with immediate funds in exchange for a portion of their future credit card sales or daily receivables. Here’s how it works:

1. Application and Approval

The process is fast—approval often happens within 24 to 48 hours. Lenders focus more on your sales history than your credit score.

2. Receiving the Funds

Once approved, you receive a lump sum you can use for marketing, inventory, equipment, or other expenses.

3. Repayment Structure

Instead of fixed payments, a percentage of your daily sales is automatically deducted until the total (advance plus fees) is repaid.

4. Flexible Payments

Since payments are tied to your sales, you pay more during high-revenue days and less during slower ones.

5. No Collateral Needed

Most MCAs are unsecured, so you don’t need to pledge assets.

A Closer Look at the MCA Process

Step-by-Step Overview

Application

Apply through a lender by submitting recent credit card and bank statements. Approval is based on sales performance, not just credit.

Funding

Approved businesses receive a lump sum—typically within days. The amount depends on your sales volume and lender terms.

Repayment

Repayment is deducted as a percentage of daily sales. This continues until the advance plus fees is fully repaid.

Flexibility

There are no fixed payments. Payments rise and fall with your sales, easing strain during slow periods.

No Collateral or Fixed Schedules

With no assets required and no monthly minimums, MCAs offer simpler cash flow management.

Is an MCA Right for Your Business?

MCAs are ideal for businesses with steady credit card sales that need fast, flexible funding. They’re not suitable for companies with inconsistent sales or those seeking low-cost, long-term financing.

Requirements

You’ll need:

• Recent credit card and bank statements

• Consistent monthly revenue

Even if your credit isn’t perfect, strong sales can get you approved.

Fast Turnaround

Decisions often come in 1–2 days, and funding shortly after. That speed makes MCAs a popular option for urgent cash needs like equipment repairs, inventory, or covering payroll.

Repayment Options

Most MCAs use one of two methods:

• Percentage of Daily Sales: Payments scale with your revenue.

• Fixed Daily/Weekly Withdrawals: The same amount is deducted regardless of sales.

Why Choose a Merchant Cash Advance?

• Speed: Quick approval and funding.

• Simplicity: Minimal paperwork and no collateral.

• Flexibility: Payments adjust with your business performance.

• Accessibility: Available even with less-than-perfect credit.

If you’re facing urgent expenses or a time-sensitive opportunity, an MCA can be a powerful tool.

The Bottom Line

A merchant cash advance can be a valuable option for businesses needing fast, flexible funding—especially when traditional financing isn’t available.

Ready to grow your business?

Contact Swish Funding today for fast, reliable financial solutions tailored to your needs.