What Is a Merchant Capital Advance?
In today’s fast-moving business world, many companies need quick, flexible funding without the hassle of traditional loans. A Merchant Capital Advance (MCA) offers fast access to working capital by advancing funds based on your future sales—typically credit or debit card transactions. Instead of fixed monthly payments, repayment is made as a percentage of your daily sales, scaling with your business activity.
How Does It Work?
The process begins with a simple application, where you provide your business’s bank statements, credit card processing history, and recent sales data. Once approved, your business receives a one-time lump sum. Repayment is automatically made by deducting a fixed percentage from your daily or weekly card sales. If you sell more, you pay more; if sales drop, you pay less. This creates a flexible, performance-based repayment structure that helps preserve cash flow.
Benefits of Merchant Capital Advances
- Fast Access to Funds: Funds are often available within 24–48 hours of approval—ideal for emergencies, opportunities, or seasonal needs.
- No Collateral Required: MCAs are unsecured, so there’s no need to pledge business or personal assets.
- Flexible Repayment: Payments adjust with your sales volume, reducing strain during slower periods.
- Less Documentation: Applications typically require fewer documents than bank loans.
- Credit-Friendly: Since approval is based on sales history rather than credit score, even businesses with imperfect credit can qualify.
- No Impact on Credit Score: MCA providers usually don’t report to credit bureaus, so your credit remains unaffected.
Who Should Consider an MCA?
Merchant capital advances are best suited for businesses that:
- Need fast cash but don’t qualify for traditional loans
- Generate a steady flow of credit or debit card sales
- Can handle daily deductions without disrupting operations
This includes restaurants, salons, retail shops, auto repair centers, and other businesses with consistent card-based revenue.
How to Apply
Applying for an MCA is straightforward. Most providers will ask for recent bank statements, credit card processing reports, and proof of revenue. Once reviewed and approved, funds are disbursed quickly—often within a day or two.
Things to Consider
While merchant capital advances offer speed and flexibility, they may come with higher fees than traditional loans. Be sure to:
- Understand the total cost, including factor rates and fees
- Compare offers from different providers
- Review how the repayment schedule aligns with your revenue flow
Bottom Line
For businesses in need of immediate funding and adaptable repayment terms, merchant capital advances offer a powerful solution. They provide fast access to cash, don’t require collateral, and adjust repayments to match your income. However, they’re best used for short-term needs and by businesses with consistent card sales. Always assess the total cost and consider alternatives like lines of credit, invoice factoring, or small business loans when appropriate.
Need working capital fast? Contact Swish Funding today to explore merchant capital advances tailored to your business needs. We’re here to help you grow—quickly and confidently.