Merchant cash advance, explained plainly

How it works

With a merchant cash advance, a portion of your future sales is purchased at a discount. You receive a lump sum now and remit an agreed amount from revenue until the purchased amount is delivered.

The cost is usually shown as a factor rate. For example (illustration only, not an offer), a factor of 1.30 on $100,000 means $130,000 is remitted in total. Because terms are short, the equivalent APR can be high. That’s why your advisor always shows the total repayment next to other options.

What owners use it for

• A short-term opportunity with a quick payback
• Covering a gap while a larger facility is arranged
• Businesses whose credit doesn’t fit a term loan yet
• Seasonal businesses that want remittances tied to sales

Who it fits

• $50,000 or more in average monthly revenue
• At least one year in business
• Regular card or bank deposits
• Existing positions considered

How to apply

1. Check your eligibility

   Amount, monthly revenue, time in business. About 60 seconds, soft pull only.

2. Send your last four bank statements

   Through the secure application. No tax returns or business plan for the first review.

3. Review your offer and choose

   Your advisor sends your offer in writing, with the total cost. Nothing is signed until you decide.

Check eligibility

Things to know before you choose

• It’s usually the most expensive form of business funding. Use it for short-term needs with a clear payback.
• Check the total repayment and the daily or weekly amount against your cash flow, not only the factor rate.
• Taking several advances at once (stacking) is the most common way businesses get into trouble. If you already have several, look at consolidation.
• Read whether remittances adjust if sales drop, and what happens if you pay early.