Merchant Cash Advance (MCA)

MCAs provide upfront funding repaid via a holdback from daily card sales. Costs depend on factor rate, fees, and sales volume.

Key Terms

• Advance amount
• Factor rate (e.g., 1.35)
• Holdback % of daily receipts

Example

$30,000 advance at 1.35 → total payback $40,500. With 12% holdback and $1,200/day receipts, daily remittance ≈ $144.

FAQs

APR equivalent?
Factor rates are not APR; compute time to repay to estimate effective APR.

Suitability?
Useful for short-term needs; costs are typically higher than loans.