A merchant cash advance (MCA) providers gives lump sum cash advances to businesses in return for a percentage of their daily credit card receipts. We took a look at the most popular merchant cash advance providers and decided to review RapidAdvance, Credibly, and Fora Financial. Read on for our reviews of these top three merchant cash advance providers.
One thing to keep in mind is that an MCA can be quite expensive and it is difficult to predict your final cost until you have nearly completed the process. This is why you may want to consider a business cash advance alternative.
Best Merchant Cash Advance Alternative: Fundbox
Fundbox is a great MCA alternative. In most cases, their loans and lines of credit will be more affordable than a merchant cash advance. They offer no credit check financing for up to $100K. It’s transparent, flexible, and primarily based on business performance, not credit history. Prequalify online in minutes.
Merchant Cash Advance Comparison Table: RapidAdvance vs. Credibly vs. Fora Financial
Cash Advance Amount
Average Factor Rate
Average Holdback Percentage
Time to Funding
Eligibility & Qualifications
3+ Months in Business, $2,500+ in Monthly Credit Card Sales
$15,000+ in Monthly Revenues
$5,000+ Credit Card Sales,
$10,000+ in Monthly Revenue
*Last Updated: May, 2018
Best Merchant Cash Advance Provider 2017: RapidAdvance
RapidAdvance is our top pick for merchant cash advance providers because they are the most inexpensive merchant cash advance option. They offer a low cost of capital between 1.09x – 1.20x and they’re also the easiest to get approved. These terms make it a great option for small businesses in need of working capital or cash flow.
The average cost of capital, known as the “factor rate,” is between 1.09x – 1.2x of the total amount borrowed. This is the best range of factor rates when compared to Credibly and Fora Financial. The other two providers on our list have potential factor rates that can reach as high as 1.4x while RapidAdvance typically has factor rates below 1.2x.
Further, RapidAdvance is the most lenient when it comes to its qualifications for eligibility. Specifically, the provider issues merchant cash advances (MCA) to any business that’s had:
- 3+ months of business operations
- $2,500+ in monthly credit card sales
The business owner will also have to have a personal credit score higher than 500 (check your credit for free here). This is in contrast to Credibly and Fora Financial, both of which require over $10,000 in monthly gross revenue for MVA approval.
RapidAdvance issues cash advances between $5,000 – $500,000, which is tied for the highest on our list with Fora Financial. Once a cash advance is issued, RapidAdvance will take between 10% – 25% of a company’s daily credit card receipts until the factor rate is repaid in full. Unlike the other two MCA providers on our list, RapidAdvance doesn’t charge any lender fees.
The average term of a merchant cash advance (MCA) is between 4 – 18 months. MCAs are approved within 48 hours and funds can be received within 72 hours.
However, RapidAdvance is the only merchant cash advance provider on our list with a minimum personal credit score requirement. If you’re a business owner with a credit score below 500, you’ll need to check out the other two providers below.
RapidAdvance also offers other financing products such as small business loans, lines of credit, as well as SBA bridge loans.
Merchant Cash Advance Provider with Fast Funding: Credibly
Credibly is a national small business lender that issues loans and merchant cash advances to companies in multiple industries. They’re the merchant cash advance provider on our list with the fastest time to funding.
If you need quick financing for working capital or cash flow needs, Credibly can approve and issue a cash advance within 48 hours. This is in contrast to RapidAdvance and Fora Financial, both of which take 72 hours to finance a merchant cash advance.
Credibly requires that businesses have at least 6 months of operations and have at least $15,000 in monthly sales. If approved, the merchant cash advance provider issues cash advances between $5,000 – $250,000.
The provider charges a factor rate (cost of capital) between 1.15x – 1.41x of the amount advanced. This is the lowest possible factor rate on our list of top merchant cash advance providers when compared to RapidAdvance and Fora Financial.
However, Credibly charges a loan origination fee of 2.5% while RapidAdvance doesn’t charge a fee. The fee is taken directly out of the merchant cash advance.
Credibly takes between 10% – 25% of a company’s daily credit card receipts. The result is a merchant cash advance (MCA) term between 3 – 14 months, depending on the volume of daily credit card transactions and holdback percentage.
However, when compared to RapidAdvance, Credibly’s minimum qualification of 6+ months business operations and $15,000k+ in monthly revenue make it harder to get approved. Further, with the 2.5% loan origination fee, it can become more costly than RapidAdvance even though it has a lower factor rate.
Like RapidAdvance, Credibly offers other financing options in addition to its merchant cash advance. For example, it also provides businesses with business expansion loan products.
Another Top Merchant Cash Advance Provider: Fora Financial
Fora Financial is a national small business lender that issues both small business loans as well as merchant cash advances (MCA). They offer factor rates between 1.15 – 1.33 and have a loan origination fee of 4%, which is the highest on our list. However, they’re the MCA provider on our list with the only discount for prepayment. So, if you need cash fast, but know you can repay it with equal speed, then Fora Financial might be right for you.
When it comes to its prepayment discounts, Fora Financial allows businesses to pay of the remainder of what’s owed at a 1.1x factor rate. This can reduce a company’s factor rate by more than 10%.
Fora Financial first requires that companies have the following prior to applying:
- 6+ months in business
- $5,000+ in monthly credit card sales
- $10,000+ in monthly revenue
This MCA provider is the only one on our list that requires 6 or more months of operations. RapidAdvance and Credibly, for example, only require 3 months of business operations.
Once approved, Fora Financial issues cash advances between $5,000 – $500,000 and assesses an average holdback percentage between 15% – 25%. This causes the average term to fluctuate between 4 – 18 months.
Fora Financial approves merchant cash advances (MCA) within 48 hours and funds can be received within 72 hours. However, the provider charges a loan origination fee of 4%, largely offsetting any prepayment discounts. The fee is taken directly out of the cash advance.
Like RapidAdvance and Credibly, Fora Financial has a small business loan option for those who qualify.
In-Depth Review: RapidAdvance vs. Credibly vs. Fora Financial
Cash Advance Amount
Merchant cash advances (MCA) are used specifically for working capital and cash flow needs. Because of this, the maximum cash advance of an MCA is therefore limited when compared to a small business loan or something similar. However, MCA providers also offer minimum cash advances much lower than what’s possible with a traditional business loan. This makes it a good option for those in need of small amounts of working capital.
The actual size of a cash advance is largely dependent on a business’s monthly gross revenue and monthly gross credit card receipts. While the actual cash advance is unique to a company’s situation, a general rule of thumb is that merchant cash advance (MCA) providers will advance up to 100% of a company’s monthly gross revenue. However, MCA providers have been known to advance between 50% – 200% of a company’s monthly gross revenue.
Average Factor Rate
Merchant cash advances (MCA) don’t have an interest rate and don’t typically get measured in APR. Instead, MCA providers make their money off of what’s known as the “factor rate.” The factor rate on an MCA is the cost of capital that a company owes on the cash advance. For more on the differences between these cost measurements, read our guide to merchant cash advances.
Average factor rates are often between 1.1 – 1.4, which means that for each dollar advanced, businesses have to repay between $1.10 – $140. MCA providers continue to take a percentage of a business’s daily credit card receipts until the factor rate is repaid in full.
Average Holdback Percentage
The average holdback percentage is the percentage that a merchant cash advance (MCA) provider takes out of a business’s merchant account each day. The average holdback percentage tells a company how much of its daily credit card sales it should expect to give to its MCA provider. Average holdback percentages vary and is typically between 10% – 38%.
Since daily credit card receipts fluctuate, the total holdback amount is different each day, which also causes the total repayment term to be variable.
Just like any type of lender, merchant cash advance (MCA) providers charge fees such as loan origination fees. However, while the repayment term on an MCA is variable, some MCA providers also offer rewards and discounts for early prepayment. It’s important to read all of the costs, fees, as well as rewards and discounts associated with a merchant cash advance.
Unlike normal small business loans, merchant cash advances (MCA) do not have a set repayment term. The time to repayment is variable and is largely based on the cash advance, the factor rate, the holdback percentage, and the volume of daily credit card receipts.
The lower the daily credit card receipts or holdback percentage and the higher the factor rate, the longer it takes to repay an MCA. This opposite is also true. Businesses should expect to pay back an MCA provider daily over a 4 – 24 month period. Remember that the MCA will take out a percentage of your credit card receipts each day until the MCA is fully repaid.
Time to Funding
Merchant cash advances are known for their quick approval time and quick time to funding. Similar to a small business loan, businesses can be approved in as little as 24 hours. It takes longer, however, to actually receive the funds, which we’ll discuss below.
During approval, business owners will typically need to provide 3 months worth of bank statements and up to two prior business tax returns, if any. Further, some merchant cash advance providers also require a personal credit score above 500.
The average time to funding is typically around 72 hours. However, there are some merchant cash advance providers that offer even faster financing times.
Eligibility & Qualifications
Merchant cash advances are known for their low qualifications for eligibility. This is why businesses typically use a merchant cash advance as the last option for working capital financing. Merchant cash advance providers usually assess business cash flow as its only qualification. However, some providers also include a business owner’s personal credit score in the qualifications for approval.
Best Merchant Cash Advance Alternatives
Given the relatively high cost of a merchant cash advance and the fact that the advanced amount is largely limited by your credit/debit card sales, you may also want to consider other financing sources. But not every alternative will be a great fit. Most business owners considering a merchant cash advance need quick business loans, so with that in mind, below is a list of best merchant cash advance alternatives.
Merchant Cash Advance Alternatives
Merchant cash advances (MCA) are short-term financing options for businesses in need of working capital and cash flow. However, MCAs are expensive and are typically used as a last resort for small businesses. Still, they are a good option if you work with a reputable MCA provider.
Our best merchant cash advance provider for small businesses is RapidAdvance. This provider offers MCAs between $5,000 – $500,000, has lenient qualification requirements, and is also the cheapest option. It boasts a factor rate between 1.09 – 1.20 and doesn’t charge a loan origination fee. This makes it perfect for a business in need of fast working capital: