Merchant Cash Advance
A merchant cash advance (MCA) or business cash advance is a form of business financing in which a lump-sum payment is given to a business in exchange for an agreed-upon percentage of future revenues or credit card sales. Merchant cash advances typically have shorter payment terms and smaller regular payment amounts than business installment loans.
While merchant cash advances can be fast and easy to qualify for, they tend to come with high payments and contingencies that the purchaser will require you to follow. Merchant cash advances are friendly for business owners with lower credit, because credit scores are not as important as sales projections when determining eligibility.
Is a Merchant Cash Advance
Right for Me?
Merchant cash advances are suitable for a wide range of businesses, such as restaurants or retail shops whose revenue comes primarily from credit card sales. However, the rates on merchant cash advances are typically higher than other types of alternative business loans. These costs may lead to a debt cycle for some businesses if they have to refinance into another business cash advance in order to repay the debt, which can cause cash-flow problems or put them at risk of default. Before turning to a merchant cash advance, small business owners can seek out alternatives, such as a flexible line of credit from Headway Capital.
How Can a Line of Credit Help My Business?
A business line of credit is a good option for small businesses that experience ups and downs. Many seasonal retail businesses that thrive in the summer months rely on lines of credit to offset the lack of steady revenue during the “off” months. A line of credit can give them access to funds that will let them continue paying their bills on time. It also gives them working capital to purchase inventory or hire additional staff, if needed, so they can be ready when peak season begins again. When that time comes, they’ll be in a position to comfortably pay off their balance.
Get Funded With Headway Capital
Headway Capital offers a business line of credit up to $100,000, and if approved, you can get your first draw by the next business day and access your line of credit whenever you want through your online account. This way you can borrow the amount you need (up to your credit limit) when you need it, and build your business at your own pace.
12, 18 or 24 months
Weekly or monthly
Business line of credit
No Hidden Fees
See our Rates & Terms for details
Clear payment terms, interest does not compound, no penalty for early payoff
FAQ About Business Cash Advances
What is a business cash advance?
A business cash advance is just another (less common) name for a merchant cash advance. A merchant cash advance is a type of business funding in which a lump sum of money is provided to a business in exchange for a percentage of its future receivables or credit card sales.
How do cash advance companies work?
Do banks offer cash advances?
1We always do a soft inquiry unless your credit file is restricted, in which case we would ask you to contact the credit bureau to lift the restriction. Doing so may result in a hard pull.