# Revenue-based financing vs MCA: what changes is how you repay

URL: https://cheapcheapwebsites.com/business-funding/revenue-based-financing-vs-mca/
Updated October 15, 2026. Funding offered by Merchant Fund Express (https://merchantfundexpress.com/revenue-based-financing-vs-mca/); Cheap Cheap Websites builds websites and does not lend.

## The short answer
A merchant cash advance buys a share of future card sales or receivables, repaid through a card holdback or fixed debit. Revenue-based financing ties repayment to total business revenue, usually a percentage of all deposits. Costs are often similar, but the right fit depends on how customers pay you and how payments should behave in slow months.

## Mechanics compared
Merchant cash advance Revenue-based financing What is purchased or repaid Future card sales or receivables Share of total revenue Payment source Card holdback or fixed daily debit Percentage of bank deposits or fixed amount Payment in slow months Falls with a holdback; fixed with a debit Falls with a true percentage Common guideline About $7,500/month, 3+ months Similar, deposit-based Best for Card-heavy businesses Mixed payment types, ACH, checks Cost structure Factor rate on amount Fixed multiple on amount For the funding-side breakdown, see the MFE revenue-based financing vs MCA page .

## Illustrative example: the same $60,000, two ways
The figures below are illustrations built on stated assumptions, not offers or quotes. Real pricing depends on the full file. Assumptions: a pet grooming chain with $90,000 a month in deposits. Both options fund $60,000 with a 2% fee ($1,200), and both total $79,800 (1.33x). The MCA uses a fixed daily debit over 200 business days. The revenue-based option takes 8% of deposits. Item MCA, fixed daily RBF, 8% of deposits Net cash received $58,800 $58,800 Total repayment $79,800 $79,800 Payment in a $90,000 month $399 a day, about $8,379 $7,200 Payment in a $70,000 month $399 a day, about $8,379 $5,600 Payoff time at $90,000 a month About 9.5 months About 11.1 months Same total cost, different shape. The fixed debit pays off sooner but bites harder in a slow month. The percentage version flexes but stretches out.

## Which fits when
Choose an MCA if most revenue comes through card terminals and you want the fastest path. A merchant cash advance is also the most widely available option at lower revenue levels. Choose revenue-based financing if customers pay by ACH, check, or online invoices, or if your monthly revenue swings and you want payments that flex. Choose neither if a working capital loan or line of credit is available at lower cost, which commonly needs about $17,500 a month and 600 to 650+ credit.

## Who neither one fits
Businesses with shrinking revenue, owners already carrying several daily debits, and anyone using the money to cover losses rather than to earn. If you are already paying two or three advances, a refinance is the better conversation. Also check restrictions: many funders restrict residential remodeling, new residential construction, and long-haul trucking.

## Documents for either
3 to 4 months of business bank statements. Card processing statements, especially for an MCA. Photo ID, a voided check, and a short application. A list of existing advances and loans with payment amounts.

## Questions to ask before signing
Is the payment a percentage or a fixed amount, and can it be adjusted if sales drop? What is the total repayment in dollars, and what is the net amount after fees? Is there any discount for paying off early? What happens if I change processors or bank accounts? Is a UCC lien filed, and what does the guaranty cover?

## Frequently asked questions
**Is revenue-based financing the same as a merchant cash advance?** They are close relatives. Both advance money against future revenue. An MCA traditionally ties to card sales, while revenue-based financing ties to total deposits. Many offers in practice blend features of both.

**Which is cheaper, RBF or an MCA?** Neither is reliably cheaper. Pricing depends on the file: deposits, credit, existing debt, and time in business. Compare total repayment against net cash received for each offer you get.

**Which is better for a seasonal business?** A true percentage-of-revenue structure usually suits seasonal businesses better, because payments shrink when deposits shrink. A fixed daily debit can strain cash in the off-season.

**Can I switch from an MCA to revenue-based financing?** Sometimes, through a refinance that pays off the existing advance. Merchant Fund Express can review a refinance or buyout of an existing advance, depending on your deposits and balance owed.

**Does either one require collateral?** Usually no specific asset is pledged for either. Contracts commonly include a general lien on business assets and an owner guaranty, so read those terms before signing.

## Website for growing businesses
Whichever structure you choose, payments come out of revenue, so the steadier your online bookings and calls, the easier repayment feels. Cheap Cheap Websites builds professional sites from $399, and Website Care at $30/month includes A/B testing and small edits to keep your booking or quote form doing its job.

Apply for funding: https://merchantfundexpress.com/current-application.html?src=ccw-revenue-based-financing-vs-mca
Website plans: https://cheapcheapwebsites.com/products