Merchant Cash Advances: Flexible Funding Based on Your Sales
Access quick capital based on your future credit card sales. Our AI matches you with the right merchant cash advance provider for your business needs.
Payments That Flex With Your Revenue
Repayments are taken as a percentage of your daily credit card sales, so you pay less on slow days and more when business is strong.
Flexible Repayment
Payments scale with your daily sales volume
Fast Approval
Get approved in hours, not weeks
Less Stringent Requirements
Accessible with challenged credit
What is a Merchant Cash Advance?
A merchant cash advance (MCA) is an alternative funding option that provides businesses with a lump sum payment in exchange for a percentage of future credit card sales. Unlike traditional loans, MCAs don't have fixed monthly payments or interest rates. Instead, repayment happens automatically as a percentage of your daily credit card receipts.
This unique structure makes MCAs particularly valuable for businesses with fluctuating sales or seasonal revenue patterns. When business is slow, you pay less; when sales increase, you pay more—but your repayment percentage always stays the same.
Key Characteristics of Merchant Cash Advances
- Factor rates instead of interest
MCAs use factor rates (typically 1.1-1.5) to determine the total repayment amount
- Percentage-based repayment
Repayments are calculated as a fixed percentage of daily credit card sales (typically 10-20%)
- No fixed repayment term
The repayment period varies based on your sales volume—typically 4-18 months
- Minimal documentation required
Typically just 3-6 months of credit card statements and bank statements
MCA Market Growth
The merchant cash advance industry has seen significant growth, with the market size exceeding $20 billion annually. This growth reflects the increasing demand for flexible, accessible funding options among small businesses.
68%
of MCAs fund within 72 hours
$50K
average advance amount
60%
approval rate vs. bank loans
How Our AI Finds Your Perfect Merchant Cash Advance
Lendec's proprietary AI technology analyzes your business profile and matches you with the right MCA provider.
Business Profile Analysis
Our AI analyzes your credit card processing volume, sales patterns, industry, and time in business to understand your unique business profile.
Provider Matching
The AI compares your profile against our database of MCA providers to identify those most likely to approve your application with favorable terms.
Factor Rate Optimization
Our system predicts the factor rates you're likely to qualify for and negotiates with providers to secure the most competitive terms.
Funding Facilitation
Once matched, our platform streamlines the application process, document submission, and funding to get you capital in as little as 24 hours.
Types of Merchant Cash Advances
Different MCA structures to meet your specific business needs and payment preferences.
| Type | Repayment Method | Factor Rates | Typical Amounts | Best For | Time to Fund |
|---|---|---|---|---|---|
| Traditional MCA | % of daily credit card sales | 1.2-1.5 | $5K-$250K | Businesses with high credit card sales volume | 1-3 days |
| ACH Merchant Cash Advance | Fixed daily/weekly ACH withdrawals | 1.1-1.4 | $5K-$500K | Businesses with lower card sales but strong bank deposits | 1-3 days |
| Split Funding MCA | Direct split at payment processor | 1.2-1.5 | $10K-$300K | Businesses wanting automated repayment at source | 2-4 days |
| Industry-Specific MCA | Varies by industry needs | 1.1-1.4 | $5K-$250K | Restaurants, retail, healthcare, seasonal businesses | 1-3 days |
Which MCA Type Is Right For You?
Choosing the right merchant cash advance structure depends on your business's payment processing setup and cash flow patterns. Our AI technology analyzes these factors to recommend the best option:
- Choose traditional MCA
If your business processes a high volume of credit card transactions daily
- Choose ACH merchant cash advance
If your business has strong bank deposits but lower credit card sales
- Choose split funding MCA
If you prefer the simplicity of automatic splits at your payment processor
- Choose industry-specific MCA
If your business operates in a specialized industry with unique cash flow patterns
How Different Industries Use Merchant Cash Advances
Discover how businesses in your industry leverage MCAs to solve cash flow challenges and fuel growth.
Retail
- Seasonal inventory purchases
- Store renovations or expansions
- New POS systems implementation
- Marketing campaigns for peak seasons
Restaurants
- Kitchen equipment upgrades
- Dining area renovations
- Staff expansion for busy seasons
- Outdoor seating additions
Healthcare
- Medical equipment purchases
- Office renovations
- Electronic health record systems
- Marketing for new services
Transportation
- Fleet maintenance or expansion
- Fuel cost management
- Insurance premium payments
- Technology upgrades
Service Businesses
- Equipment purchases or upgrades
- Marketing and advertising
- Training programs
- Expansion to new service areas
Success Story
"As a seasonal retail business, we needed funding to stock up for our busy holiday season. The merchant cash advance through Lendec gave us $75,000 within 48 hours, and the percentage-based repayment meant we weren't stressed during slower months. The AI matching found us a rate that was 0.2 points lower than we'd found elsewhere."
— Sarah T., Retail Store Owner
Merchant Cash Advance Eligibility Requirements
Understanding what providers look for can help improve your chances of approval.
Basic Requirements
- Monthly credit card sales: $5,000-$10,000+ (varies by provider)
- Time in business: 3-6+ months
- Personal credit score: 500+ (some accept lower)
- Consistent revenue pattern
- No open bankruptcies
- No major tax liens (some providers may be flexible)
Documentation Needed
- Credit card processing statements
Last 3-6 months of processing statements
- Bank statements
Last 3-4 months of business bank statements
- Business ID
Business license, EIN documentation
- Voided business check
For setting up ACH withdrawals
- Simple application
Basic business information and funding needs
Understanding Merchant Cash Advance Costs
Factor rates, holdback percentages, and other key terms that determine the total cost of your MCA.
Factor Rates
Factor rates typically range from 1.1 to 1.5 and determine your total repayment amount:
Advance Amount × Factor Rate = Total Repayment Amount
Example: $10,000 × 1.3 = $13,000 total repayment
Factor rates are influenced by your business history, credit card volume, industry risk, and time in business.
Holdback Percentage
The holdback percentage is the portion of your daily credit card sales that goes toward repayment:
• Typical range: 10-20% of daily credit card sales
• Higher percentages = faster repayment but more cash flow impact
• Lower percentages = longer repayment but less daily impact
The holdback percentage affects your daily cash flow but not the total repayment amount.
Additional Costs
Other potential costs to be aware of:
- Administrative fees (typically $395-$595)
- ACH setup fees
- Underwriting fees
- Early termination fees (if applicable)
Factor Rate vs. APR: Understanding the True Cost
While merchant cash advances use factor rates instead of interest rates, it's helpful to understand the equivalent APR (Annual Percentage Rate) for comparison with other funding options.
Example Calculation:
For a $10,000 MCA with a factor rate of 1.3 and 6-month estimated repayment period:
- • Total repayment: $13,000 ($10,000 × 1.3)
- • Total cost: $3,000 ($13,000 - $10,000)
- • Estimated APR: ~60% (varies based on actual repayment speed)
Lendec's AI Advantage:
Our AI technology calculates the estimated effective APR for each MCA offer based on your specific business's sales patterns and projected repayment timeline. This helps you make informed comparisons between different funding options and understand the true cost of each MCA offer.
Merchant Cash Advance Application Process
Our AI-powered platform streamlines the MCA application process for faster funding.
AI-Powered Matching
Our AI analyzes your business profile, credit card processing history, and bank statements to determine which MCA providers are most likely to approve your application with favorable terms.
Document Upload
Upload your credit card processing statements, bank statements, and business ID through our secure portal. Our system automatically organizes and verifies your documents to ensure a complete application.
Rapid Review & Approval
MCA providers review your application and typically provide an approval decision within hours. Our platform tracks the status of your application and provides real-time updates.
Funding
Once approved and you've accepted the offer, funding typically occurs within 1-2 business days via ACH transfer to your business bank account. Repayment begins automatically according to the agreed terms.
Merchant Cash Advances vs. Traditional Business Loans
When considering funding options for your business, it's important to understand how merchant cash advances compare to traditional business loans. Each option has distinct advantages and considerations that may make it more suitable for your specific situation.
| Feature | Merchant Cash Advance | Traditional Business Loan |
|---|---|---|
| Approval Time | 24-72 hours | 2-8 weeks |
| Credit Requirements | Flexible (500+ often acceptable) | Strict (650+ typically required) |
| Documentation | Minimal (3-6 months statements) | Extensive (tax returns, financial statements, business plan) |
| Repayment Structure | Percentage of daily sales | Fixed monthly payments |
| Cost Structure | Factor rate (1.1-1.5) | Interest rate (5-30% APR) |
| Term Length | Variable (4-18 months typically) | Fixed (1-10 years) |
| Collateral Required | No | Often yes |
When to Choose a Merchant Cash Advance
Merchant cash advances are particularly well-suited for businesses that:
- Need funding quickly (within days rather than weeks)
- Process a significant volume of credit card transactions
- Have seasonal or fluctuating revenue patterns
- Have been in business for a shorter period (3-6 months+)
- Have challenged credit or limited credit history
- Need funding for short-term opportunities or challenges
The Future of Merchant Cash Advances
The merchant cash advance industry continues to evolve with technological advancements and changing business needs. Key trends to watch include:
- AI-powered underwriting for more accurate risk assessment and better rates
- Integration with accounting software and payment processors for seamless repayment
- Hybrid products that combine features of MCAs and traditional loans
- Greater transparency in pricing and terms
At Lendec, we're at the forefront of these innovations, using advanced AI technology to match businesses with the most competitive MCA providers and terms available in the market. Our platform continuously learns and improves to ensure you get the best possible funding options for your specific business needs.
Ready to Apply for a Merchant Cash Advance?
Let our AI match you with the right MCA provider for your business needs.
Get Matched NowFrequently Asked Questions About Merchant Cash Advances
Get answers to common questions about MCAs and how our AI-powered platform can help.
Related Resources
MCA Calculator
Estimate your daily payments, total cost, and repayment timeline with our interactive MCA calculator.
Try CalculatorMCA vs. Business Loans
Compare merchant cash advances with traditional business loans to understand which option is best for your needs.
Read ComparisonMCA Success Stories
Read how other businesses successfully used merchant cash advances to solve cash flow challenges and grow.
View Success Stories