Merchant Cash Advance — Fast Funding Repaid From Your Sales
Last updated: July 2026 · By the LoanSource Pro editorial team
A merchant cash advance (MCA) — also called revenue-based financing — is a lump sum of cash repaid automatically through a percentage of your daily or weekly sales, priced with a factor rate instead of interest. It is one of the fastest, most accessible funding products available, and also one of the most important to understand fully before signing, because its speed comes at a higher cost than bank financing.
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How an MCA works
You receive a lump sum — through our partner REIL Capital, up to $5 million with terms of 4–24 months. Repayment happens automatically as a fixed percentage of your sales: strong days repay more, slow days repay less. No collateral is required because the advance is secured by future revenue, and funding can arrive in as little as one day.
Factor rates explained — with a worked example
A factor rate is a multiplier applied to your advance that fixes your total repayment upfront. It is not an interest rate — the cost doesn't shrink if you repay early (unless your agreement includes early-payoff discounts; ask).
| Example | Amount |
|---|---|
| Advance received | $100,000 |
| Factor rate | 1.2 |
| Total repayment | $120,000 |
| Cost of financing | $20,000 |
| Repayment method | e.g., 10% of daily card sales until $120,000 is repaid |
Because that $20,000 cost is typically paid back within 4–24 months, the equivalent annualized rate is far higher than a bank loan's. The honest comparison isn't MCA vs. bank — it's MCA vs. missing the payroll, the inventory buy, or the contract.
MCA vs loan
| Merchant cash advance | Short-term loan | |
|---|---|---|
| Speed | As fast as 1 day | 1–3 days |
| Repayment | % of daily sales — flexes with revenue | Fixed weekly/bi-weekly/monthly |
| Cost structure | Factor rate — fixed total cost | Interest — can reward early payoff |
| Collateral | None — secured by future sales | Varies |
| Credit sensitivity | Lowest — revenue matters most | Moderate |
When an MCA makes sense
- Strong, consistent daily sales (retail, restaurants, e-commerce, services).
- A time-sensitive use with a clear return — inventory at a discount, a contract requiring upfront costs, an equipment repair keeping revenue flowing.
- Bank options are unavailable or too slow, and invoices aren't available to finance.
When an MCA is the wrong tool
We'll be direct, because it earns your trust and saves you money:
- Thin margins. If a daily sales percentage would squeeze cash flow, the cure becomes the disease.
- Long-payback investments. Renovations or expansions that pay off over years shouldn't be funded with months-long financing — compare a term loan via LoanPro Advisor.
- Covering losses. Financing recurring shortfalls with high-cost capital deepens the hole.
- Unpaid invoices exist. If cash is stuck in receivables, invoice financing is usually cheaper.
Qualification
- 6+ months in business
- ~$15K+ monthly revenue (or ~$250K+ annual)
- 3 months of business bank statements
- 500+ FICO qualification paths — no hard credit pull to check options
Merchant cash advance FAQ
How much does a merchant cash advance cost?
MCA cost is set by a factor rate — a multiplier on the advance. At a 1.2 factor rate, a $100,000 advance is repaid as $120,000, so the financing cost is $20,000 regardless of how fast you repay. Because repayment is often under a year, the equivalent annual rate is much higher than a bank loan — which is the price of speed and accessibility.
Is a merchant cash advance a good idea for my business?
An MCA fits when you have strong, consistent daily sales, need cash within days, and the funded activity returns more than the financing cost. It's a poor fit for thin-margin businesses, long-payback investments, or covering ongoing losses — in those cases a line of credit, invoice financing, or a term loan is usually cheaper.
How fast can I get a merchant cash advance?
Through our funding partner REIL Capital, revenue-based funding decisions come within 24 hours and funding can arrive in as little as one day, with amounts up to $5 million and no assets required.
What's the difference between a line of credit and a merchant cash advance?
A line of credit is reusable capacity you draw and repay on your schedule, priced on the drawn balance. An MCA is a one-time lump sum repaid automatically from a percentage of daily sales at a fixed total cost. The LOC is generally cheaper and more flexible; the MCA is faster and easier to qualify for with lower credit.
Do I need collateral for an MCA?
No. Revenue-based financing through REIL Capital is secured by future sales rather than assets, which is why it works for businesses without equipment or property to pledge.
See what your sales qualify you for
Up to $5M · Decisions within 24 hours · Funding as fast as 1 day
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