A merchant cash advance (MCA) provides a lump sum cash advance for a percentage of daily credit card receipts. An MCA provider buys future credit card sales from a business to make the advance. We ranked the top five MCA providers by comparing over 50 lenders across 15 features and speaking to 15 business owners.
Best Merchant Cash Advance Companies Comparison
Provider | Loan Amount | Lowest APR | Minimum Annual Revenue | Funding Speed |
|---|---|---|---|---|
$250,000 | 30% | $36,000 | One day | |
$250,000 | 35% | $150,000 | Two days | |
$400,000 | 40% | $180,000 | Two days | |
$500,000 | 35% | $120,000 | Three days | |
$2 million | 10% | $50,000 | Two days |
*Last Updated: January 2020
A merchant cash advance should rarely be the first choice for a small business. The rates of this lump-sum financing can be high and misleading, and daily payments that lenders deduct from receivables can strain cash flows and damage a business. Business owners should attempt to qualify for alternatives to an MCA before applying.
How We Evaluated Merchant Cash Advance Companies
Merchant cash advances are an expensive source of financing, so it’s important to calculate MCA costs and repayment terms. The total capital business owners can get and the speed of funding are also important factors to evaluate. It’s also important to be mindful of qualification requirements and customer reviews when choosing a provider.
The top five merchant cash advance companies are:
- National Funding: No hidden fees
- CAN Capital: Quick funding
- Credibly: High revenues
- Fora Financial: New businesses
- American Express Merchant Financing: American Express merchants
National Funding: No Hidden Fees
National Funding is a direct lender and offers a merchant cash advance to small business owners. It stands out among providers for both its long operating history and its lack of hidden fees. While business owners will still have a high APR because a merchant cash advance is expensive, National Funding also offers some of the easiest-to-meet qualifications available.
National Funding Rates & Fees
- Starting factor rate: 1.1 to 1.16 times the loan amount
- Estimated APR: 30% to 150% APR; customized for each borrower
- Additional fees: None
Unlike the other merchant cash advance lenders on our list, National Funding does not have a loan origination fee associated with its advances. Borrowers who receive an offer with the same factor rate from National Funding and another lender will pay less with National Funding. For example, if both Fora Financial and National Funding offer a factor rate of 1.1x, an MCA from National Funding will be less expensive because Fora Financial charges an origination fee.
National Funding Terms
- Loan amount: Up to $250,000
- Holdback percentage: 15% to 25%
- Repayment term and schedule: Up to 18 months with automatic deductions based on daily credit card receivables
- Collateral: Unsecured (blanket UCC filing on business assets is likely)
- Personal guarantee: Required
- Speed to funding: As quick as one day
While National Funding provides less funding than other providers, it offers substantial repayment terms and a low holdback percentage. Borrowers can also get funding quicker with National funding compared to other providers on our list, like CAN Capital and Credibly.
National Funding Qualifications
- Credit score: No minimum requirement
- Time in business: At least one year
- Annual revenue: No requirement, but it requires monthly credit card transactions over $3,000
At $3,000 per month, National Funding has one of the lowest minimum monthly credit card sales requirements of the providers on our list. For example, Fora Financial only requires three months of business operations but requires $5,000 or more in monthly credit card sales
National Funding Documentation Requirements
- Four months of credit card statements
- Four months of bank statements
- Tax returns
- Balance sheet
- Profit and loss statement
What National Funding Is Missing
Overall, National Funding is our choice as the best merchant cash advance provider on this list. The one downside to National Funding’s MCA is that its maximum advance amount is only $250,000. This is less than some other providers that we have reviewed; for example, Fora Financial can advance up to $500,000.
National Funding Reviews
Most users who left National Funding reviews gave it excellent marks. These positive reviews were focused on National Funding’s excellent customer service and how quickly they can provide funding. The negative reviewers were disappointed in the overall costs associated with the advances, and not understanding the rates and terms upfront.
How to Apply With National Funding
Business owners can complete most of the application process online with National Funding. It requires applicants to submit some basic personal and business information as well as verification of credit card receivables. National Funding may also request additional documents and a representative may contact applicants to discuss next steps. The entire process takes a few hours.
CAN Capital: Quick Funding
Businesses with monthly credit card sales of at least $4,500 and six months of business operations can get a merchant cash advance from CAN Capital. This combination of requirements allows newer businesses to be eligible. However, CAN Capital has short repayment terms and high factor rates resulting in a high APR.
CAN Capital Rates & Fees
CAN Capital rates and fees include:
- Average factor rate: 1.15x to 1.35x
- Estimated APR: 35% to 200%
- Origination fee: None
Unlike National Funding, which has no additional fees for its advances, CAN Capital charges an administrative fee of $395 to get funds from it. The administrative fee for CAN Capital may be less than the providers that charge a percentage as an origination fee. For example, if a business borrows $20,000 from Credibly, the origination fee would be $500, while the same amount from CAN Capital would only have the $395 fixed origination fee.
CAN Capital Terms
- Loan amount: $5,000 to $250,000
- Repayment term: Up to 13 months
- Repayment schedule: Daily payments debited from credit card receivables
- Collateral: UCC filing on business assets
- Personal guarantee: Required
- Time to funding: As quick as two business days
To repay the advance, CAN Capital will take between 10% and 25% of daily credit card receivables until a business repays the loan in full. At $250,000, CAN Capital has the same maximum merchant cash advance amount as National Funding and Credibly.
CAN Capital Qualifications
- Personal credit score: No stated minimum; fair to excellent credit expected
- Time in business: At least six months
- Annual revenue: At least $150,000
CAN Capital is less restrictive on business qualifications for an MCA than National Funding. CAN Capital doesn’t have a stated minimum credit score requirement, but a representative at the company informed us that the expectation is for fair to excellent credit. The annual revenue requirement with CAN Capital is also higher than National Funding, and can be more difficult to meet for small businesses.
CAN Capital Documentation Requirements
- Three months of credit card statements
- Three months of bank statements
- Tax returns
- Balance sheet
- Profit and loss statement
What CAN Capital Is Missing
CAN Capital only has a revenue requirement (and no specific credit card receivables requirement), making it more accessible to businesses. However, at $250,000, CAN Capital has one of the lowest maximum advance amounts of the five providers on our merchant cash advance companies list. For businesses looking to borrow more than $150,000, we recommend reviewing top CAN Capital alternatives.
CAN Capital Reviews
Positive user reviews of CAN Capital tout a simple and efficient process with solid customer service. Many customers state that they have used CAN Capital for multiple loans and have had great luck with the company. Negative user reviews are primarily from applicants who CAN Capital did not approve or borrowers who feel that the repayment terms are unfair.
How to Apply With CAN Capital
Business owners can submit initial funding details with CAN Capital online and have the option to upload credit card processing statements. A CAN Capital representative contacts applicants to request additional documentation, discuss the product, and share an approval decision. CAN Capital may approve some candidates without additional requests and the process takes a few hours.
Credibly: High Revenues
If a business has been operational for at least six months and has $15,000 in monthly revenue, Credibly can approve and issue a cash advance within 48 hours. Advance amounts range from $5,000 to $400,000, with factor rates ranging from 1.15x to 1.41x. Credibly charges a 2.5% origination fee, and its average holdback percentage is 10% to 25%.
Credibly Rates & Fees
- Average factor rate: 1.15x to 1.41x
- Estimated APR: 40% to 250%
- Additional fees: 2.5% origination fee
Credibly charges an average factor rate between 1.15x and 1.41x of the amount advanced. Unlike National Funding, which doesn’t charge any fees, Credibly charges a loan origination fee equal to 2.5% of the advance amount.
Credibly Terms
- Cash advance amount: $5,000 to $400,000
- Average holdback percentage: 10% to 25%
- Typical repayment term: Three to 18 months
- Time to funding: 48 hours
Credibly provides merchant cash advances from $5,000 to $400,000 within 48 hours and takes between 10% and 25% of a company’s daily credit card receipts for payment. The result is an MCA term between three and 18 months, depending on the volume of daily credit card transactions and holdback percentage.
Credibly Qualifications
- Time in business: At least six months
- Monthly revenue: At least $15,000 on average
- Credit score: At least 500
Unlike National Funding and CAN Capital, which have a set qualification requirement based on monthly credit card sales, Credibly qualifies applicants based on their gross monthly revenues. This may give borrowers more latitude to qualify than basing the requirement on credit card sales revenue. However, for businesses with low volume credit card sales, repayment will take longer.
Credibly Documentation Requirements
- Three months of credit card statements
- Three months of bank statements
- Tax returns
- Balance sheet
- Profit and loss statement
What Credibly Is Missing
Credibly is the best fit for newer businesses with its low time in business requirement of six months. While Credibly’s origination fee is lower than the 4% fee of Fora Financial, borrowers looking for a lower fee can use CAN Capital, which has a fixed origination fee of $395. For applicants with a credit score greater than 500, National Funding might be a better fee-free option.
Credibly Reviews
The vast majority of Credibly’s reviews came from customers happy with the company. Positive user reviews rave about the professionalism of the loan representatives, the attentiveness of Credibly’s customer service, and the efficiency of the process. Negative user reviews are limited and seem to focus on confusion over varying loan terms.
How to Apply With Credibly
Business owners can complete the entire application process with Credibly online by connecting their credit card processor to the lender. Credible requires some additional personal and business information and can provide an approval decision the same day.
Fora Financial: New Businesses
If a business is starting out and has only been operating for six months, Fora Financial can issue a cash advance within 72 hours. Advance amounts range from $5,000 to $500,000, with factor rates ranging from 1.15x to 1.33x. Fora Financial also has an origination fee that makes its MCA more expensive, and it has a high minimum revenue requirement.
Fora Financial Rates & Fees
- Average factor rate: 1.15x to 1.33x
- Estimated APR: 35% to 175%
- Additional fees: 1% to 4% origination fee
Fora Financial charges a factor rate between 1.15x and 1.33x of the amount advanced. Unlike National Funding, which doesn’t charge any fees, Fora Financial charges a loan origination fee equal to 4% of the advance amount.
Fora Financial Terms
- Cash advance amount: $5,000 to $500,000
- Average holdback percentage: 15% to 25%
- Repayment term: Four to 18 months
- Time to funding: 72 hours
Fora Financial offers up to $500,000 for a merchant cash advance, which is twice the amount available from National Funding or Credibly. However, borrowers have to wait a little longer to receive funding because it can take up to 72 hours to receive an MCA through Fora Financial.
Fora Financial Qualifications
- Time in business: At least six months
- Monthly sales revenue: $5,000 in monthly credit card sales and $10,000 in monthly revenue
- Credit score: No stated minimum requirement
Fora Financial has a short time-in-business requirement of only six months. CAN Capital also requires six months of business operations and National Funding requires a full year. Fora Financial does not have a stated minimum credit score requirement, but business owners with poor credit should have a long operational history or high credit card receivables.
Fora Financial Documentation Requirements
- Three months of credit card statements
- Three months of bank statements
- Tax returns
- Balance sheet
- Profit and loss statement
What Fora Financial Is Missing
Despite offering merchant cash advances to businesses that have been in operation for only six months, Fora Financial requires $5,000 of monthly credit card sales. Fora Financial’s origination fee would be burdensome depending on the amount borrowed, while lenders like National Funding do not have any origination fees.
Fora Financial Reviews
Fora Financial customer reviews are positive around the web. Users have enjoyed positive customer service experiences, fast turnaround times, and clear and concise explanations of products. The negative reviews remain positive regarding customer experiences and interactions with the company, but cite the daily payback as burdensome to their businesses.
How to Apply With Fora Financial
Business owners can start the application process for Fora Financial online and complete it over the phone. After applicants submit a request and some basic information, a Fora Financial representative will contact the business to discuss next steps and collect documents. The application process can extend for over a day depending on the volume of applicants.
American Express Merchant Financing: Alternative for AMEX Merchants
American Express Merchant Financing is not an MCA, but rather a short-term loan available only to businesses that accept American Express credit card payments. If a business accepts American Express credit card transactions, a loan through American Express Merchant Financing will be a less expensive financing solution than a merchant cash advance would be.
American Express Merchant Financing Rates & Fees
- Fixed fee: 1.75% to 20%
- Estimated APR: 10% to 40%
- Additional fees: None
Instead of interest, American Express Merchant Financing charges a fixed fee for its loans, and those fees vary by the term of the loan. Six-month loans have fixed fee rates ranging from 1.75% to 8%, 12-month loans have rates ranging from 3.5% to 12%, and 24-month loans have rates of 7% to 20%.
American Express Merchant Financing Terms
- Loan amount: $5,000 to $2 million
- Typical repayment term: Six, 12, or 24 months
- Time to funding: Two to 10 days
The loan amounts offered and repayment terms are better with American Express than with other merchant cash advance providers. However, the largest difference between an MCA and merchant financing is the overall cost of capital—a loan from American Express Merchant Financing will be a much less expensive source of financing.
American Express Merchant Financing Qualifications
- Time in business: At least 24 months
- Annual business revenue: At least $50,000
- Annual credit card sales: At least $12,000
- Credit score: At least 650
American Express Merchant Financing requires 24 months of business operations, which is greater than National Funding’s one-year requirement. It also requires that a business have $50,000 in annual revenue and $12,000 in annual credit card sales. These revenue requirements are lower than most of the providers on this list.
What American Express Merchant Financing Is Missing
American Express Merchant Financing is the least expensive option on our list and offers funding up to $2 million. However, unlike the other providers on this list, American Express Merchant Financing only provides financing to businesses that accept American Express credit card payments. If a business does not accept American Express, it won’t be able to use this financing method.
American Express Merchant Financing Reviews
We could not find American Express Merchant Financing reviews, either positive or negative. Reviews for American Express were from customers who are cardholders or American Express merchants. However, those reviews were positive and can provide insight into the level of service customers can expect.
How to Apply for American Express Merchant Financing
Business owners who accept American Express can apply for merchant financing online and receive an approval decision on the same day. Applicants must fill out some basic personal and business information, but there is no need to upload documents because American Express already has transaction data.
Visit American Express Merchant Financing
Pros & Cons of a Merchant Cash Advance
A merchant cash advance is expensive and requires daily payments made out of credit card receivables. However, for some business owners, it may be the only funding option because of its low minimum qualifications and convenient funding speeds. Although business owners have little control over the repayment amount, the automatic payments are easier to manage and budget for than other financing options.
Pros of a Merchant Cash Advance
- Low minimum qualifications: Low minimum credit score and time-in-business requirements are a staple of merchant cash advance lenders. This gives small business owners an opportunity to qualify for funding after being turned down by other lenders.
- Quick funding speeds: Like many online business loans, merchant cash advance providers offer funding within the same week that it approves an application. This gives business owners access to quick capital to address emergencies and take advantage of opportunities.
- Easy-to-manage repayment: Lenders deduct automatic daily payments from a merchant cash advance, which they calculate as a percentage of credit card receivables for that day. This makes it an easy financing option to manage for small business owners.
Cons of a Merchant Cash Advance
- Little control over repayment schedule: Business owners make automatic daily payments, so slow months result in low payment amounts and busy seasons result in higher payments. This leaves business owners with limited control over the repayment schedule of a merchant cash advance.
- High overall costs for funding: The overall cost of a merchant cash advance is a major drawback because lenders calculate rates as a set fee and can result in APRs over 200%.
- Frequent payments: Making daily payments can be convenient, but can also put a strain on working capital. Lenders withdraw daily payments without considerations for taxes and tips, which can damage the working capital position of a business.
Bottom Line
Merchant cash advances are short-term financing options for businesses in need of a quick source of funds for working capital. However, MCAs are expensive and business owners use them as a last resort for small businesses. Still, they are a viable option if a business works with a reputable merchant cash advance company.
Kristine jenney
Do these companies have login into your bank account?
Jason Rueger
Kristine,
No, they do not have login info. They get your routing number and account number so they can deposit money into your business bank account. But, they do not get your login username or password or anything for your bank account.
Jason
Charna
For tax purposes, does a business treat amounts repaid that exceed amounts advanced as straight interest or is it necessary to book it in another way?
Ian Atkins
Hi Charna,
Thanks for joining the conversation!
While we aren’t able to give tax advice, section 4 of this IRS document may be helpful. It will give you a better base understanding for when you speak with a tax professional.
Best,
Ian
sscha005
Actually you missed wgfinancing.com
Priyanka Prakash
Hi there,
I looked into wgfinancing.com. They didn’t specify rate information on their website. Did you have a good experience with them as a borrower?
Regards,
Priyanka