Merchant Cash Advance vs Bank Loan: Which Is Right for Your Business?
Quick Answer Should I get an MCA or a bank loan? A bank loan is almost always cheaper. SBA loans: 6–13% APR. Bank lines of credit: 7–15% APR. MCAs: 40–350%…
Category: MCA Basics
Learn how merchant cash advances work, understand factor rates, compare MCAs to bank loans, and make informed borrowing decisions.
Merchant Cash Advance Default Rates: Causes, Consequences, and How to Avoid Default
Quick Answer What is the MCA default rate? Industry estimates suggest 10–20% of MCAs end in default, though precise data is scarce because MCAs are not subject to standardized reporting.…
Merchant Cash Advance Pros and Cons
Quick Answer What are the pros and cons of a merchant cash advance? Pros: Fast funding (24–48 hours), no collateral required, flexible repayment tied to revenue. Cons: Extremely high effective…
MCA Stacking Explained: How It Impacts Your Business
Quick Answer What is MCA stacking? MCA stacking means having multiple merchant cash advances at the same time. It is the #1 cause of MCA-related business failure. Multiple daily ACH…
Merchant Cash Advance Interest Rates: How They Work
Quick Answer How do MCA interest rates work? MCAs technically do not have interest rates — they use factor rates. But the effective cost is the same. A factor rate…
How Does a Merchant Cash Advance Impact Your Credit Score?
Quick Answer Do MCAs affect your credit score? MCAs are not reported to consumer credit bureaus directly. However, defaulting can lead to judgments, collections, and UCC liens that do appear…
Can You Write Off a Merchant Cash Advance on Taxes?
Quick Answer Can you deduct MCA fees on your taxes? The fee portion of an MCA (total repayment minus the advance amount) may be deductible as a business expense. The…
What is a Merchant Cash Advance Factor Rate, and How Does It Affect Repayment?
Quick Answer What is an MCA factor rate? A factor rate is a multiplier (typically 1.1–1.5) applied to your advance amount to determine total repayment. A factor rate of 1.35…
Merchant Cash Advance FAQ: What You Need to Know
Quick Answer What do business owners need to know about merchant cash advances? MCAs are not loans — they are purchases of future receivables. Factor rates of 1.2–1.5 translate to…