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Merchant Loans: What About a Merchant Cash Advance?

Are you a small business owner in need of capital right now? What about merchant loans? Why not apply for a merchant cash advance (MCA)? Below, you can find helpful info on where to get reliable and affordable merchant funding.

Merchant Funding: Merchant Cash Advance

The last 10 years, starting from the financial crisis, proved to be quite successful for merchant cash advances or MCAs, turning them into the most popular form of merchant funding in fact. Recent data in the field shows that the MCA business accounted for $10 billion in 2015.

Well, an MCA isn’t technically a loan: it’s simply a sale. However, the terms “MCA borrowers” and “MCA lenders” are still “trendy” in the industry. So, what an MCA does is to grant you upfront cash in exchange for a percentage of your future sales. This percentage is known as “holdback” or retrieval rate.

Historically, MCAs have been suitable for businesses with revenues generated mainly from credit/debit card sales. So, an MCA is fine for growing your business or sustaining cash flow temporarily.

The reason why merchants like an MCA include:

  • Straightforward application process
  • Quick funding
  • Being unsecured: no need to provide collateral
  • Perfect credit isn’t a must
  • Flexible payments: slow sales – less payment
  • High borrowing limits

When it comes to the money cost, it varies. However, it’s based on a factor rate, instead of an interest rate. Alternatives to an MCA include term loans, business credit cards, as well as business lines of credit.

Merchant Loans & MCAs: Why You Need an MCA

Today, lots of business owners choose an MCA over traditional business loans. If you’re among them, remember that it’s vital to find a reputable business funding provider to apply for merchant funding, e.g., a merchant cash advance.

Consider applying to First American Merchant, a respectable alternative online lender and processor. FAM specializes in the high risk space and offers go-for merchant loans both to low and high risk businesses. FAM’s only requirement concerning merchant funding is that businesses should have a monthly minimum amount of $5.000 in credit card sales.

FAM offers its popular cash advance at the lowest possible rates and with exceptional terms. First American Merchant doesn’t take your personal credit or business financials as the main fundamental point to determine your eligibility. Instead, FAM looks at 2-3 months of your sales and revenue history from your business.

Now, let’s see what businesses should opt for an MCA:


  • Businesses that have no time to wait for working capital and have a solid credit history, e.g., retailers or restaurants
  • Newer businesses with enough credit card sales but without an established credit history because they’re starters
  • Businesses unable to provide collateral
  • Businesses in certain circumstances, e.g., seasonal retailers trying to stock their store with merchandise before the holidays, or businesses trying to buy equipment to win a contract
  • Businesses processing a high number of transactions each month, e.g., restaurants, bars, and many retail and even nail salons
  • Businesses launching a new product line

Businesses in need of some extra capital to get a new client set up

With an MCA, the payback payments can be withdrawn on a daily basis right from your bank account where the cash and credit/debit card sales deposits are based on a set term. The repayment period is usually 3 – 18 months, with the majority of MCAs falling in the 6- to 12-month range.

To sum up, unlike a bank loan, an MCA isn’t associated with a fixed monthly payment with an interest rate. An MCA can be a striking option for some businesses, so go through the info above to see whether you’re one of them.