A merchant cash advance, also known as an MCA, revenue advance or business cash advance, is a way to borrow a lump sum based on your future sales or revenue. Requirements are generally more lenient than other types of business financing, and funding is typically fast, making it an option for newer businesses or those with less-than-perfect credit. But this type of funding can be expensive, so it’s important to compare multiple lenders to find the best deal.
Consider our top picks for business cash advances, including a wide range of advance amounts, loan terms and rates.
Finder’s business loan experts analyzed dozens of lenders offering merchant cash advances. We ultimately chose lenders with competitive rates, fast funding and flexible repayment terms.
Some of the criteria we used to evaluate lenders include:
It’s a good idea to compare multiple lenders that offer MCAs and consider the following factors before deciding.
A merchant cash advance, which may also be referred to as a business cash advance or revenue advance, is a cash advance based on future sales or revenue. The advance comes as a lump sum payment, and you agree to pay it back through a percentage of your incoming sales.
Most commonly, repayments are deducted automatically from your account weekly or daily, although some agreements may allow for bi-weekly or monthly repayments. Terms are generally short for business cash advances, usually three to 12 months, but some lenders may offer longer terms.
Revenue advances typically aren’t renewable, unlike business lines of credit, but some lenders advance additional funds after paying off a percentage of your original loan. And while there isn’t usually an incentive to repay MCAs early, there are a few lenders, like Fora Financial, for example, that give discounts for early repayment.
Consider the advantages and disadvantages of MCAs.
A merchant cash advance is an expensive form of funding. You may want to consider these other types of loans for small businesses.
| Type | Typical loan amounts | Typical term lengths | Best for |
|---|---|---|---|
| SBA Loans | $13,000 to $5 million | Up to 25 years | Established businesses with decent credit that don’t qualify for other types of funding |
| Equipment financing | Up to 100% of the cost of the equipment | 3 to 10 years | Businesses that need heavy equipment or other expensive machinery |
| Term loans | Up to $2 million | 1 to 10 years | Businesses with good credit looking for large loan amounts and predictable monthly payments |
| Business lines of credit | $2,000 to $250,000 | 6 months to 5 years | Businesses looking for immediate short-term funding or want a renewable lending source |
| Microloans | $500 to $50,000 | Up to 6 years | Startup businesses or women- or minority-owned firms |
| Invoice factoring | 70% to 90% of unpaid invoices | 1 to 3 months | Business to business (B2B) companies with a lot of outstanding invoices |
| Invoice financing | 70% to 80% of unpaid invoices | 1 to 3 months | B2B companies with a lot of outstanding invoices |
We currently don't have that product, but here are others to consider:
How we picked theseThe Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
The exact requirements to qualify can vary significantly by lender, but you’ll typically need to meet the following minimum criteria:
Some lenders may also check your credit, although it’s often only a soft pull. But in general, your credit score isn’t as heavily weighted for merchant cash advances as it is with other types of business financing.
In general, the application process for a business cash advance goes as follows:
Some lenders may require an extra step where you talk to a lending specialist prior to funding, but that’s not always the case.
Because MCAs are generally one of the more expensive forms of business financing, you may want to consider a few other options.
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