Is a merchant cash advance a loan?

It is structured as a purchase of future receivables, not a loan. That is why it uses a factor rate and a purchased amount instead of an interest rate and principal.

Does paying early save money?

Not automatically. The purchased amount is fixed. Some agreements include an early payoff discount, so ask before signing if you expect to pay it off ahead of schedule.

MFE's pages use roughly 0.5x to 1.5x monthly revenue as an illustrative sizing range. Your deposits, existing payments and history decide the actual offer.

What credit score is needed?

Credit is flexible for this product. MFE considers scores from 500, and stronger credit usually means a lower factor rate.

Can I get a second advance later?

Possibly, but carrying several advances strains cash flow. If you already have multiple positions, a refinance is usually the healthier path to review.

Merchant Cash Advance: Factor Rates and True Cost

The short answer

A merchant cash advance (MCA) is a purchase of a portion of your future receivables. You receive a lump sum, and the funder collects an agreed total, called the purchased amount, through daily or weekly remittances from your deposits. Cost is set by a factor rate, such as 1.35, rather than an interest rate. MFE's guidelines commonly point to about $7,500 or more in monthly revenue and 3+ months in business, with flexible credit.

How an MCA works mechanically

An MCA is structured as a sale, not a loan. The funder buys a fixed dollar amount of your future receivables at a discount and pays you now. You then remit part of your deposits until the purchased amount is delivered.

Remittances are usually daily on business days or weekly. Some agreements take a percentage of deposits, so slower weeks mean smaller remittances. Others set a fixed amount that can be adjusted if revenue drops. Read which kind you are signing.

Factor rate versus interest rate

A factor rate is a multiplier. Advance $20,000 at a 1.30 factor rate and the purchased amount is $26,000. The $6,000 is the cost, and it does not shrink if you repay faster unless the agreement offers an early payoff discount.

Because the cost is fixed and the term is short, the equivalent annual rate of an MCA is usually much higher than a bank loan. That is not hidden; it is the price of speed and flexible qualification. Compare offers on net cash, remittance and total repayment, not on the factor rate alone.

Check what your business qualifies for

Merchant Fund Express reviews merchant cash advance requests from $5,000 to $5,000,000. Scores from 500 are considered, and same-day decisions are common on complete files.

Check funding options with Merchant Fund Express

Worked example: true cost math

Illustrative example. These figures are illustrations built on stated assumptions, not offers. Real pricing depends on the file MFE reviews.

Assumptions: a pizza shop with about $40,000 in monthly card and cash deposits accepts a $40,000 advance, which sits at 1x monthly revenue, inside MFE's illustrative 0.5x to 1.5x sizing range. The factor rate is assumed at 1.35, a $1,200 fee comes out at funding, and remittances run over about 126 business days.

Item	Amount
Advance amount	$40,000
Fee at funding	$1,200
Net cash received	$38,800
Purchased amount ($40,000 x 1.35)	$54,000
Daily remittance ($54,000 / 126)	$428.57
Total cost ($54,000 - $38,800)	$15,200

At roughly 21 business days a month, remittances total about $9,000, or about 22.5% of deposits. Ask yourself whether the shop can carry that in February, not just in July.

When an MCA fits and when it does not

It can fit a business with steady card or bank deposits, a short-term need with a clear payoff, and credit that keeps it out of bank loans. Examples: buying inventory before a sales event, repairing a walk-in cooler, or covering a gap while a slow month passes.

It does not fit a business already carrying one or more advances, since stacking positions can choke cash flow; see MCA stacking explained. It is also a poor fit for long-term projects that will not pay back within months, or for owners who qualify for a cheaper working capital loan.

Funding brings customers. Is your website ready for them?

An MCA is repaid from daily sales, so anything that brings in steady customers makes the remittance easier to carry. Make sure your menu or service list, hours and online ordering or booking are current before you take on the payment. Cheap Cheap Websites builds professional sites from $399, with Website Care at $30/month to keep those details accurate.

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What to prepare

3 to 4 months of business bank statements
Owner ID and a voided business check
The short application on the MFE merchant cash advance page
Payoff details for any existing advance, if you have one

Credit scores from 500 are considered, and stronger credit usually earns better pricing. Decisions on complete files are often same day, and funding commonly follows the next business day, though neither is promised.

Questions to ask before you sign

What is the net amount that will reach my account?
Is the remittance a percentage of deposits or a fixed amount, and how do adjustments work if sales drop?
Is there any discount for paying early?
What happens if I want to refinance later?

If the answers make the remittance uncomfortable, ask for a smaller advance. Taking less is often the smartest move.

Related funding guides

Revenue-based financing MCA stacking explained MCA refinance Business funding with bad credit How much can my business borrow Merchant cash advance at Merchant Fund Express

Cheap Cheap Websites builds websites. It does not lend or make funding decisions. Funding is offered by our funding partner, Merchant Fund Express, and every request is subject to its review and approval. Figures on this page are illustrations, not offers. Updated October 15, 2026.

A merchant cash advance is a sale of future revenue, priced by a factor rate