How a merchant cash advance works
Merchant Cash Advance
$5,000 – $1,000,000
- 3+ months in business
- $5,000+ monthly revenue
- 500+ credit score
Typical requirements. Individual lenders set their own criteria and availability differs by state and industry.
A merchant cash advance is not technically a loan. The funder buys a share of your future sales at a discount and collects it back as a fixed percentage of your daily or weekly deposits.
Repayment moves with revenue, so a slow week costs you less than a busy one. That flexibility is the main reason owners choose it over a fixed monthly payment.
Approval leans on deposit history rather than credit, which is why the credit floor is the lowest of anything here.
When it suits
- Businesses with steady deposits but a thin or damaged credit file
- Covering a gap of a few weeks rather than a multi-year investment
- Owners turned down elsewhere on credit score alone
What to watch for
- Cost is quoted as a factor rate rather than an APR, which makes it hard to compare against a loan. Ask what the total repayment is in dollars.
- Daily or weekly collection can strain cash flow if revenue drops after funding.
- Taking a second advance while the first is outstanding is expensive, and some funders treat it as a default.
Common questions
Is a merchant cash advance a loan?
No. A loan has principal, an interest rate, and a fixed schedule. An advance is a purchase of future receivables at a discount, collected as a share of deposits. That distinction is why the cost is quoted as a factor rate.
What credit score do I need?
Some of our lending partners start around 500. Deposit history usually matters more than the score itself.
How is the cost calculated?
As a factor rate. A 1.3 factor on $50,000 means repaying $65,000 in total. Because there is no fixed term, the same factor rate costs more the faster it is repaid, which is what makes it hard to compare with an APR.
How long does my business need to be open?
Three months is the common floor. Funders want enough deposit history to see a pattern.
See whether this fits your business
A few questions and we will match your answers against what each lending partner requires. Two minutes, and checking will not affect your credit score.
US Loan Portal is not a lender and does not make credit decisions. We provide information and introduce business owners to third-party lending partners. All funding is subject to lender approval, and amounts, rates, and terms are set by the lender. Ranges shown are typical and not an offer of credit.
Find out in two minutes
A few questions, no documents, and nothing happens to your credit score.
Checking won’t affect your credit score.