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Merchant Cash Advance Guide
Fast, flexible funding solutions for small and medium-sized businesses
What is an MCA?
A lump sum of money given to a business that is paid back as a percentage of revenue.
The MCA provider collects repayment by taking a fixed percentage of daily or weekly credit card transactions by bank account withdrawals.
Benefits of Merchant Cash Advance
Flexible Payments
Tailored repayment options to suit business needs. Payments adjust with your sales.
High Approval Rates
Accessible funding even with imperfect credit. Focus on business performance, not just credit scores.
Simple Application
Quick and easy process to secure funding. Complete online in minutes.
Fast Funding
Get the capital you need in 1-3 days. No lengthy approval processes.
Merchant Cash Advances are built for speed, flexibility, and simplicity. Everything traditional banks usually don't offer. An MCA gives you immediate working capital with minimal hassle, flexible repayments, and fast turnaround, empowering small business owners to act fast, seize opportunities, and stay competitive in today's fast-paced market.
Market Overview and Growth Trends
The global Merchant Cash Advance market is experiencing steady expansion from 2023 to 2032
Merchant Cash Advance Market Size and Growth
$15.8B
2023 Market Size
$46.9B
2032 Projected Size
12.6%
Annual Growth Rate (CAGR)
9 Years
Growth Period (2023-2032)
This graph shows the steady expansion of the global Merchant Cash Advance (MCA) market from 2023 to 2032. The market grows from US$15.8 billion in 2023 to around US$46.9 billion by 2032, representing a compound annual growth rate (CAGR) of 12.6%. This consistent upward trend indicates strong demand for alternative financing options among small and medium-sized businesses.
Businesses We Fund
Entertainment
Funding for entertainment businesses
Medical
Funding for medical businesses
Construction
Funding for construction businesses
Cleaning
Funding for cleaning businesses
Maintenance
Funding for maintenance businesses
Fitness Centers
Funding for fitness centers
Energy
Funding for energy businesses
Retail
Funding for retail businesses
Restaurants
Funding for restaurant businesses
Grocery Stores
Funding for grocery stores
Salons and Spas
Funding for salon and spa businesses
Please note: Some high-risk sectors including cannabis, gambling, law firms, and real estate development companies are often excluded from funding options.
Requirements
Transaction History
Regular credit card transactions or consistent bank deposits are required.
Operational Duration
The business must be in operation for 6-12 months.
Payment Acceptance
The business must regularly accept credit card/debit card payments.
Bank Statements
Bank statements are needed from the past 3-6 months.
Once you've met the basic requirements, applying for a Merchant Cash Advance is fast and simple. You can complete the entire process online in just minutes.
Merchant Cash Advance Process
📋 Evaluate Needs
Determine funding needs and suitability of MCA
📁 Gather Documents
Collect necessary financial and business documents
✅ Check Credit
Assess credit score for better terms
📤 Submit Application
Complete and submit the online application
⏳ Wait for Offer
Await review and offer from the provider
🔍 Review Terms
Examine the offer details including rates
✍️ Sign Agreement
Accept and sign the contract
💵 Receive Funding
Funds deposited into the business account
🔄 Start Repayment
Daily deductions begin from credit card sales
Rates and Fees
Factor Rates
MCAs use factor rates instead of interest rates. A typical factor rate ranges from 1.10 to 1.50.
Example: If you receive $10,000 with a 1.20 factor rate, you'll repay $12,000 total.
Fees to Consider
- Origination Fees: One-time fee for processing the advance (typically 2-5%)
- Administrative Fees: Monthly or weekly processing fees
- Early Repayment: Some providers may charge penalties for early payoff
Important: Always calculate the total cost of your MCA, including all fees, to understand the true cost of funding. Higher factor rates mean higher total repayment amounts.
Some Things To Look Out For
High Costs
MCAs typically have higher costs than traditional loans. Factor rates can translate to APRs of 40-150% or more, making them one of the most expensive forms of business financing.
Daily Payment Pressure
Daily or weekly payments can strain cash flow, especially during slow sales periods. Make sure your business can handle consistent payment deductions without disrupting operations.
Renewal Trap
Some businesses get caught in a cycle of repeatedly renewing MCAs to cover cash flow gaps, leading to mounting debt. Only use MCAs when you have a clear plan for increased revenue.
Limited Regulations
MCAs are not technically loans, so they're not subject to the same lending regulations. This means less consumer protection and potential for predatory practices from unscrupulous providers.
Compare MCA and LOC for Business Funding
Understanding the key differences between Merchant Cash Advances and Lines of Credit
| Merchant Cash Advance (MCA) | Line of Credit (LOC) | |
|---|---|---|
| Approval Time | 24-48 hours | 2-5 days |
| Amount Range | $3,000 - $1,000,000 | $5,000 - $1,000,000 |
| Credit Score | 550+ | 600+ |
| Repayment | Daily/weekly percentage of sales | Flexible draws and repayments |
| Cost | Factor rate 1.10-1.50 (higher cost) | Interest rate 8-25% APR (lower cost) |
| Collateral | No collateral required | May require collateral |
| Best For | Quick cash, urgent needs | Ongoing cash flow management |
| Flexibility | Fixed advance amount | Revolving credit line |
💰 Merchant Cash Advance (MCA)
💳 Line of Credit (LOC)
Bottom Line: MCAs are faster and easier to qualify for, but more expensive. Lines of Credit offer lower costs and more flexibility, but require better credit and take longer to secure.
Frequently Asked Questions
How quickly can I get funded with an MCA?
+Most MCA applications are approved within 24-48 hours, with funds deposited as fast as the same day or within 1-3 business days once approved.
What credit score do I need to qualify?
+Trulo Capital requires a minimum FICO score of 550. We focus more on your business's cash flow and performance than your personal credit history.
How does repayment work?
+Repayment is typically structured as a fixed percentage of your daily credit card sales or as fixed daily/weekly bank account withdrawals. This means payments adjust with your business performance. You pay more when sales are high and less when they're slow.
Is collateral required for an MCA?
+No. MCAs are unsecured funding options, meaning you don't need to put up collateral like property or equipment to qualify.
What documents do I need to apply?
+To begin your application, you'll need 3 months of business bank statements and a completed application form. To finalize funding, we'll also need a driver's license (color copy) and a voided business check or bank letter.
Can I get an MCA if I already have a business loan?
+Yes. Many businesses use MCAs alongside other financing products. However, existing debt obligations will be considered during the approval process to ensure you can manage the additional repayment.
Ready to Get Started?
Get fast, flexible funding for your business. Apply now or speak with our team to learn more.