How a merchant cash advance works
A merchant cash advance (MCA) is an alternative financing option for small business owners who need liquid capital fast.
Where the money comes from
A merchant cash advance is a purchase of a portion of your future receivables. Credibly provides a lump sum of capital upfront in exchange for a set amount from your future sales.
Because remittances are tied to your revenue history rather than a fixed repayment schedule, MCAs can be a great option for businesses with variable or seasonal sales, like restaurants or retail stores.
What it’s used for
An MCA lets you advance your business with additional capital — whatever that means for you.
- Purchase equipment, inventory, or supplies
- Cover payroll
- Invest in marketing or advertising
- Finance additional overhead for peak times
- Cover costs for a short-term project or repair emergencies
The capital from a small business cash advance is yours to use for any business purpose.
How it works
Like a working capital loan, a Credibly Merchant Cash Advance gives you immediate access to capital you can put to work right away. The key difference is in how your remittance is structured.
With a loan, payments are sized to a repayment schedule; the amount is fixed to the terms of the agreement, regardless of how your business is doing month to month. With a Credibly MCA, your daily or weekly remittance is calculated based on your actual revenue at the time of approval, so the amount reflects what your business can realistically support.
Remittances are withdrawn automatically via ACH, daily or weekly. If your actual sales in a given month fall short of projections, Credibly’s reconciliation process allows you to request a credit for any overage back to your account.1
Benefits of a small business cash advance
A small business cash advance gives you room to act on opportunities by tapping into your future receivables. By accessing capital from your future receivables, you can invest in your business today and remit as your sales come in.
Predictable remittances
The daily or weekly remittance amount is set at approval and stays the same for the life of the agreement. If a previous month came in slower than expected, you can request a credit for the difference.1
Fast funding
Approval for an MCA can happen in as fast as 2 hours, with funds available as fast as 4 hours after approval.1
No collateral or personal guaranty required
You don’t have to put up property, equipment, or personal assets to qualify. Your future receivables secure the advance.
Transparent, fixed cost
Your total cost is set at approval using a factor rate and does not compound, so you know exactly how much you owe from day one.
Less stringent credit requirements
MCAs offer more lenient credit score requirements than traditional loans.
With a Credibly Merchant Cash Advance, you can access:
- Business financing from $5,000 to $600,000
- Terms from 3–24 months1
- Factor rates as low as 1.112
- Automatic daily or weekly remittances
Who qualifies for a merchant cash advance
Qualifying for MCAs is simpler and faster than traditional loans. Even if your small business doesn’t meet the qualifications for traditional financing products, a merchant cash advance may still provide an accessible option.
To qualify for a Credibly Merchant Cash Advance, your business needs to meet a few basic criteria:
- At least 6 months in business
- Minimum $20,000 in average monthly revenue
- A credit score of 550 or higher
- U.S.-based operations
- Revenue deposited into a bank account
Merchant cash advance vs loans and other financing options
A merchant cash advance is not a loan, but a sale of a portion of future receivables for money you can use right away. Depending on the nature and needs of your business, an MCA can offer advantages over traditional loans and other financing options. When choosing the right financing option for your business, consider:
- What you need the capital for, and how quickly
- How consistent your sales are, and what your slower months look like
- The total cost of the advance and how it fits your cash flow
- The credit score and documentation required to qualify
To make things simpler, let’s compare three common financing options for small businesses: merchant cash advances, working capital loans, and business lines of credit.
Merchant Cash Advance (MCA) | Working Capital Loan (WCL) | Business Line of Credit (LOC) | |
|---|---|---|---|
Usage | Businesses with fluctuating sales or in need of quick cash. | Businesses looking for predictable and manageable repayments to cover short-term expenses. | Businesses looking for flexible, on-demand access to funds on a recurring basis. |
Eligibility Requirements |
|
|
|
Approval Speed | As fast as 2 hours1 | As fast as 2 hours1 | As fast as 4 hours1 |
Funding Speed | As fast as 4 hours1 | As fast as 4 hours1 | As fast as 24 hours1 |
Remittance Structure | Fixed daily or weekly ACH transfer sized to your revenue at approval; monthly reconciliation available if actual sales fall below projections1 | Fixed daily or weekly payments depending on the loan terms | Flexible, revolving credit with weekly or monthly payments |
Financing Amount | $5,000 – $600,000 | $25,000 – $600,000 | $25,000 – $300,000 |
Collateral | Percentage of future receivables | No collateral required for unsecured loans | No collateral required for unsecured LOCs |
Factor/interest rates
| Factor rates as low as 1.112 | Factor rates as low as 1.112 | Rates vary by deal3 |
If you’re not sure which financing option is right for your business, Credibly can help you estimate your financing costs to find the most appropriate solution.
Why choose Credibly as your financing provider
Credibly provides fast and flexible financing solutions tailored to the unique needs of small businesses. As one of the leading merchant cash advance companies in the US, Credibly has helped over 55,000 small businesses leverage opportunities, scale effectively, and achieve their dreams.
We offer small business cash advances with achievable qualifications and a straightforward application process, with approvals and funding in hours. We don’t just rely on credit score: Our data-driven approach considers over 130 factors to create an accurate picture of your business’s health, which means more flexibility than you’d typically find with traditional financing.
In addition to MCAs, we offer a range of small business financing resources to help your company grow. We want to see you succeed.
- Trusted and certified funding
Credibly is SOC 2-certified. Our fast processes, trustworthy programs, and friendly experts are why we have a 4.8 out of 5 rating on Trustpilot.
- Best-in-class customer service
Credibly business experts are here from your first application through renewals and beyond, ready to help at every stage.
- Effortless automatic remittances
Remittances are withdrawn automatically from your bank account, so you can focus on running your business.
Visit our reviews to see how businesses use Credibly financing to take the next step in their growth.
We are trusted by:
How to apply for a merchant cash advance
Ready to get started? You can explore your options without damaging your credit score. Easily apply for a merchant cash advance for a small business in 4 steps:
Apply online
Click “Get Started” to apply for a merchant cash advance.
Gather required documents
We require certain documents from you during the approval process. Be ready with bank statements and a government-issued ID to start.
Approval in as little as 2 hours1
We’ll review your application and let you know if you’re approved in as little as 2 hours.
Receive funding in as little as 4 hours1
If approved, your requested financing can be transferred to your bank account in as little as 4 hours.
