{"id":796367,"date":"2019-08-04T21:38:02","date_gmt":"2019-08-05T01:38:02","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=796367"},"modified":"2026-06-17T09:48:17","modified_gmt":"2026-06-17T13:48:17","slug":"merchant-cash-advances","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/business-loans\/merchant-cash-advances","title":{"rendered":"Merchant Cash Advances: Where to Apply & How They Work"},"content":{"rendered":"

Merchant cash advances (MCAs) can be a quick and easy way to get your hands on fast cash for your business. These advances come with very flexible repayment plans, but they can be much more expensive than business loans due to higher rates and fees. Learn more about how MCAs work, including where you can apply, pros and cons, and what you need to do to qualify.<\/p>

Companies that offer merchant cash advances<\/h3>

These lenders offer a variety of business financing options, including MCAs. Factor rates are around 1.10 to 1.50.<\/p>
Lender<\/th>Factor rate (approx.)<\/th>Loan amount<\/th><\/th><\/tr><\/thead>
\"Journey<\/a><\/td>1.09 \u2013 1.35<\/td>$10,000 \u2013 $500,000<\/td>Go to site<\/a><\/td><\/tr>
\"Advance<\/a><\/strong><\/td>1.10 \u2013 1.50<\/td>$10,000 \u2013 $1,000,000<\/td>Go to site<\/a><\/td><\/tr>
\"Merchant<\/a><\/strong><\/td>1.13 \u2013 1.28+<\/td>$5,000 \u2013 $800,000<\/td>Go to site<\/a><\/td><\/tr><\/tbody><\/table>

Need more options? We\u2019ve searched the market for additional relevant MCAs.<\/em><\/p>

Compare more MCAs<\/a><\/p>

How do merchant cash advances work?<\/h3>

A merchant cash advance lets you borrow money quickly in exchange for a slice of your future sales. It is not a traditional loan. Instead, a funding company buys your future credit card sales at a discount. The company looks at your past sales data to decide how much cash to give you. Then, they add a fee called a \u201cfactor rate\u201d to determine your total payback amount.<\/p>

Example: Receiving a $100,000 advance<\/h4>

For example, let\u2019s say you get a $100,000 advance with a 1.30 factor rate. This multiplier means your total payback amount is $130,000. You agree to pay this back by giving the company 20% of your daily credit card sales.<\/p>

If you have a busy Monday and bring in $2,500 in card sales, the funding company automatically takes $500 from your account the very next day. If Tuesday is slower and you only make $1,000, they take $200. This automatic daily deduction happens every single business day until you completely clear the $130,000 debt.<\/p>

What is the factor rate for MCAs?<\/h3>

The factor rate usually ranges from 1.10 to 1.50. This is an incredibly high-risk, expensive financial product. Because the lender automatically takes a percentage of your daily sales until you are paid up, this can severely drain your daily cash flow and leave you struggling to pay regular bills like payroll or rent.<\/p>

How to calculate the total repayment<\/h4>

You can calculate how much you\u2019ll pay back in total by multiplying the amount you\u2019re borrowing by the factor rate. For example, if you receive a $50,000 advance with a factor rate of 1.20, your formula looks like this: $50,000 x 1.20 = $60,000<\/strong>.<\/p>

You will owe a total of $60,000. The $10,000 difference is the flat fee you pay for the capital.<\/p>

How is a merchant cash advance different from a business loan?<\/h3>

Merchant cash advances are different from business loans<\/a> in a number of ways. MCAs are guaranteed by your credit card sales, requiring no collateral, and they\u2019re easier to qualify for. You can get an MCA within 24 hours, which is faster than a traditional bank business loan.<\/p>

Despite their advantages, MCAs typically come with much higher rates and fees. You may end up paying hundreds or thousands more in cash advance fees over the course of your term. This is because rates and fees aren\u2019t regulated like they are for traditional business loans.<\/p>

Advantages and disadvantages of merchant cash advances<\/h3>

Advantages<\/h4>