Best Merchant Cash Advance Companies for Small Businesses

8 min read

To negotiate the best deal from a merchant cash advance company, determine their factor rates, holdback amount, and origination fees first. Your monthly sales, cash flow, and business credit history will also influence the total interest you pay will vary between lenders.

How MCAs Work

Merchant cash advance providers work very differently than lenders who offer traditional small business loans. MCA approvals are mainly based on your monthly credit card sales rather than your business credit profile or commercial credit scores.

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First and foremost, you need to watch out for predatory lenders that dominate the MCA marketplace. Be sure you read all the fine print to get detailed clarification on any clauses related to late payments, business liens, or personal guarantees.

Do note that MCA repayment costs for people with bad credit and low monthly revenues are usually the highest of all business financing options, including high APR credit cards. There is no traditional interest rate for merchant cash advances either and you’ll have to understand what factor rates, holdback charges, and origination fees to calculate your loan payments.

Rather than having fixed loan payments on a monthly schedule, a business owner typically pays back their MCAs daily or weekly out of future credit card sales. If you’re looking to build credit at the most appropriate business credit bureaus, merchant cash advance companies won’t help, as they generally will only report delinquent payment history, and nothing else.


Merchant cash advances are known to be the last resort for small business owners who’ve been turned down everywhere else. With very little paperwork required, funds from an MCA can usually be deposited into your business checking account within a few days. Having bad credit or a poor personal credit score will generally not disqualify you from getting approved.

At times, you can obtain a higher loan limit over a business credit line based on your daily credit card sales volume. Be wary though, as for every advantage MCA providers offer. the price is typically added to the final amount of loan interest you’ll end up paying.

Factor Rate

It is widely known that the most easily accessible merchant cash advances (MCA) have very high interest rates. This is due to the way they are calculated, via a specific method that is calculated by the loan value multiplied by the factor rate.

An example of a business receiving a merchant cash advance of $100,000 with a factor rate of 1.5 would have to pay back a total of $150,000. That’s a flat 50% interest rate for 12 months, but if the MCA is paid in 6 months rather than 12, that would increase the actual interest rate amount to 100%.

Like loan interest rates and business credit card APR, factor rates will vary between lenders and have a sliding scale based on creditworthiness.

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Your loan payment amount on a merchant cash advance is determined by the holdback charge on your credit card sales, which can range from 8%-30%. Typically, the holdback is paid daily or weekly with the amount deducted from your credit card transactions being paid towards your balance (loan amount x factor rate).

For example, if you get approved for a $10,000 MCA with a factor rate of 1.4 ($14,000 payback) with a holdback rate of 20%, you would need average daily credit card receipts of $300 ($60 daily holdback payment) over a total of nearly eight months (233 days) to repay your loan.

If you have seasons with high and low sales, then your daily payments will be higher when business is booming, and lower when times are slow.

If you’re able to negotiate weekly payments with your merchant cash advance provider, then your payments will be roughly the same, just paid once a week rather than daily.

Interest Rate

While MCA factor rates are static, be very conscious of your payback term. The shorter length of time a lender requires to pay back your MCA loan, the higher your interest rate will be. So, before signing any contract be sure you understand these three terms as they will determine your true loan cost:

  1. Factor Rate: Determines the exact amount you need to pay back
  2. Holdback Percentage: Determines how fast you will pay back your loan daily or weekly
  3. Administrative CostsExtra fees added by the lender that can have many names such as origination feeadministrative fee, or closing fee.

Before agreeing to terms with an MCA lender, be sure to calculate how quickly you expect your loan to be paid, and the actual cost you will pay over that time. If it’s too high, look for another lender with a lower factor rate or lower hold back percentage, or no administration costs.

To calculate the total interest paid on daily MCA payments use the formula below:

 (Payback - Loan) / Loan 365 / ((Loan Factor Rate) / (Daily Sales Holdback))
Daily SalesLoanFactor RatePaybackHoldbackPaymentDaysInterest
$300$10,0001.4 $          14,00010%$3046731%
$300$10,0001.4 $          14,00020%$6023363%
$300$10,0001.4 $          14,00030%$9015694%
MCA Interest Rate Calculated with Daily Payments

For weekly MCA payments use this formula to calculate the total interest paid:

 (Payback - Loan) / Loan 52 / ((Loan Factor Rate) / (Weekly Sales Holdback))
$2,100$10,0001.4 $          14,00010%$2106731%
$2,100$10,0001.4 $          14,00020%$4203362%
$2,100$10,0001.4 $          14,00030%$6602198%
MCA Interest Rate Calculated with Weekly Payments

Remember, there is no reward for paying off your MCA early, so higher holdback percentages will typically translate into a higher amount of interest paid.


First, let’s clarify that an MCA is the same as a traditional business loan. It is only a cash advance that is granted proportionally to a business’s credit card sales volume.

The most common repayment manner for MCAs is via daily debit taken directly from your credit card processing account or business bank account. A few MCA lenders offer weekly repayment, but this usually requires you to have a decent credit score and much more than the minimum required monthly revenue amount

Typically, there is no grace period on an MCA loan either and you will have to pay back your loan very next day after funding is approved.

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Top MCA Lenders

When it comes to business financing options, the best merchant cash advance companies provide quick funding based on a low volume of expected future sales. While different from a small business loan, be sure you measure each lender’s factor rate, holdback percentage, and extra origination fees charged.

  1. Credibly
  2. Rapid Finance
  3. Fora Financial
  4. Reliant Funding



An alternative lender that offers MCA funding up to $400,000. While Credibly’s application process is simple, be sure to note their 2.5% origination fee in your loan costs. Approvals can be as fast as 4 hours, with funds being released into your small business bank account within 48 hours.

Credibly starts their factor rates at 1.09, which is one of the lowest in the industry, but they also require a minimum of $15k in monthly revenues. They deduct repayments daily from your current sales and there is require a minimum credit score of 500, and at least 6 months of business activity.

Rapid Finance

Rapid Finance
Rapid Finance

In less than 72 hours you can get a business cash advance between $5,000 and $500,000 from Rapid Finance. Although they don’t mention them online, their factor rates are said to average around 1.22-1.31 with only 3 months in business and a $5,000 revenue required.

The loan amount and holdback charge will vary depending on revenues and your business credit risk. Payments are based on a percentage of monthly credit card sales and other accounts receivables.

Fora Financial

Fora Financial
Fora Financial

This MCA lender approves funding up to $500,000. It is another decent option for startups that have at 6 months in business and at least $5,000 in monthly sales. While not publically listed their factor rates are said to be 1.1 to 1.3 Do note that like have an origination fee as well.

Reliant Funding

Reliant Funding
Reliant Funding

They will grant MCAs up to the $400,000 limit, with approval in only a few hours, and money being transferred in 24 hours. The Reliant Funding procedure is simple, and their factor rates start around 1.16.

The repayments are made either daily or weekly, yet there are no factor rates presented on their website and they will be determined individually. An account manager will be allocated to your business, and together you will run an assessment of your business, and Reliant’s representative will determine your optimum factor rate.

There are some minimum requirements to qualify for a Reliant merchant cash advancement. To apply, your company has to be at least six months old and should make a minimum of $10,000 monthly revenue.