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Guide to Merchant Cash Advances

If you need to finance your small business quickly, a merchant cash advance can be a great solution to your problem. MCAs are becoming more and more popular in the modern world of business, and many small business owners view an MCA as the best funding option to consider.

A merchant cash advance shouldn’t be regarded as a loan. You get a lump sum from the MCA provider, which is automatically repaid based on a percentage of your daily credit card receipts.

The mentioned percentage is known as “holdback” or retrieval rate. Usually, it may range from 5% to 20% based on the amount of the advance, credit card sales and the period during which the repayment must be made. Terms can vary from 90 days to 18 months, depending on the size of the advance. You must repay your MCS immediately after you get the funds.

As for the amount you can borrow, it is determined by the average credit card sales. The provider will review your receipts over the past 3-6 months and decide on your eligibility. Generally, you may find MCAs that range from 50% to 250% of your credit card transactions.

A merchant cash advance offers the following benefits:

  • Fast and easy application process that can entirely be completed online
  • Quick funding with fast approval
  • No perfect credit is required
  • No collateral is required
  • Flexibility of payments
  • High borrowing limits

Are you looking for business funding for your small business? Consider turning to for a small business loan, including a merchant cash advance. First American Merchant (FAM) is a reputable business loan provider and an award-winning payment processor that specializes in the high risk sector.

Thanks to the advantages offered by a merchant cash advance, this funding option can be ideal for businesses that need fast access to cash and boast an established credit card transaction history. Restaurants and retailers are among the best candidates. However, this doesn’t mean that an MCA cannot be a good fit for a new business with enough credit card sales but without a solid credit history.