What it is
An MCA is not a loan with an APR on the contract — it is an advance with a factor (e.g., 1.25) multiplied by the advance to get total payback. Payments are usually daily or weekly as a percent of sales or fixed ACH.
Who it fits
- Businesses with steady card volume that exhausted cheaper options and need speed.
- Situations where the math still works after seeing total payback — rare for long-term needs.
What many lenders look for
- Many programs want ~3–6+ months in business.
- Many cite $4–15K+ monthly card or bank deposit volume.
- 500+ FICO is common, but cost is driven by factor and term, not score alone.
Pros
- Speed and minimal use-of-proceeds paperwork.
- Approval can be revenue-driven.
Cons
- Total payback is often much higher than APR-style loans.
- Daily payments can squeeze cash in slow weeks.
- Stacking multiple advances is a common failure mode.
Questions to ask any provider
- What is total payback (advance × factor), not just the factor?
- Daily or weekly debits — can I see a calendar?
- Is there a prepayment discount?
Run the numbers
Illustration only — not a quote or offer.
MCA total cost & estimated APR
Estimated APR uses the IRR of equal each business day payments (borrower cash flows), then annualizes — higher than spreading the fee evenly over calendar days when payments are frequent.
- Total payback
- $64,000
- Cost as % of advance
- 28.0%
- 130 payments of
- $492
- Estimated APR (IRR-based)
- 178.2%
Compare other options
FAQ
- Why show estimated APR?
- Factor rates are hard to compare. We estimate APR from payback, advance, and term so you can compare to a term loan or LOC.