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What is the Difference Between a MCA and a Term Loan?
Unlike a loan, we provide your business with capital by purchasing a percentage of your future receivables. Daily remittances are an agreed upon percentage of your sales that are automatically deducted from your credit card processor or bank account. Cash advances are a perfect solution for seasonal businesses or ones with fluctuating revenue because they ensure that your remittances are based on what you can afford.
How Does a Small Business Cash Advance Work?
MCAs are fundamentally different than small business loans, and because of which, the process of receiving funds and fulfilling your obligation is also different.
How To Get a Merchant Cash Advance
Merchant Advance Details
Once we figure out the funding that’s best for you, we’ll let you know the cost* for each option. For your ease and convenience, we present merchant cash advance pricing as a factor rate: Factor Rate = Purchased Amount ÷ Advanced Amount
Merchant Cash Advance: Advantages and Disadvantages
While merchant cash advances are a great financing option for short-term funding and seasonal businesses, other financing products may be better-suited for certain initiatives.
FAQs About Merchant Cash Advances
Are merchant cash advances legal?
Merchant cash advances aren’t considered loans — they are considered purchases. Because of which, there isn’t a lot of regulation associated with them. In general, MCA companies do not need to abide by state usury laws, which limits how much interest companies can charge on certain loans or credit cards.
Do merchant cash advances hurt your credit score?
A merchant cash advance will not directly hurt your credit score, but it could indirectly low your score by raising your outstanding balance and your credit utilization ratio.
How much does a merchant cash advance cost?
Cash advances are priced as a total cost of capital with fees and factor rates included. Factor rates are typically based on the risk associated with funding your business.