The best alternatives to a merchant cash advance (MCA) should provide a combination of better rates, fees, and repayment terms. Many of the best lenders will also have flexible qualification requirements and excellent customer service.
We’ve selected lenders that issue different types of loans. Some examples include equipment financing, working capital loans, and credit lines that allow funds to be used for any business-related purpose.
Here is our list of the eight best merchant cash advance alternatives:
- Clarify Capital: Best overall for bad credit
- Lendio: Best for low revenue businesses
- 1West: Best online lending experience
- SBG Funding: Best for unsecured custom financing terms
- Smarter Finance USA: Best for equipment financing
- Creditfy: Best easy high limit credit line
- Bluevine: Best line of credit for high revenue businesses
- FundThrough: Best for invoice factoring
Get a business loan in 24-48 hours with Clarify Capital. |
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Best Merchant Cash Advance Alternatives at a Glance
Clarify Capital: Best Overall for Bad Credit
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Rates & Terms | |
Starting Interest Rate | Varies by loan program |
Estimated APR | As low as 5% |
Loan Amount | Up to $5 million, but may vary by loan program |
Repayment Term | Varies by loan program |
Repayment Schedule | Daily, weekly, bi-weekly, and monthly |
Funding Speed | As fast as same day |
Financing Type | Term loan, line of credit, invoice factoring, SBA loans, equipment financing |
Qualifications | |
Credit Score |
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Time in Business | 6 months |
Revenue | $10,000 monthly |
Why We Like Clarify Capital
If you’ve had issues getting approved for a business loan, you should consider Clarify Capital. It has low credit score requirements for many of its programs, works with newer companies, and is a broker with over 75 lenders in its network, giving you multiple chances to get approved. For these reasons, it also made our list of the best working capital loans.
Clarify Capital offers many different types of loans. Some examples include term loans, lines of credit, invoice factoring, Small Business Administration (SBA) loans, and equipment financing. While qualification requirements can vary depending on the type of loan you apply for, you should be able to find some financing options with at least three months’ time in business and $10,000 in monthly revenue.
A major benefit of working with a broker like Clarify Capital is the ability to work with a dedicated loan advisor. This advisor will not only walk you through the process but can also offer recommendations for the type of loan best suited for your business goals and needs.
Applying with Clarify Capital can be done on the provider’s website or by calling the company’s toll-free number. Applications can be completed in under two minutes with no fee or obligation to get a loan. Once approved, funds can be disbursed within 24 hours.
Lendio: Best for Low Revenue Businesses
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Rates & Terms | |
Estimated APR | 3% to 60%, varies based on loan type |
Loan Amount |
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Repayment Term |
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Repayment Schedule | Varies based on loan type |
Funding Speed | 24 hours to 1 month; varies based on loan type |
Financing Type | AR financing, credit line, term loan, SBA loan, and equipment financing |
Qualifications | |
Credit Score |
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Time in Business |
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Revenue |
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Why We Like Lendio
Lendio is another broker in our guide with over 75 lenders in its network. However, it’s able to work with companies that have lower revenue earnings. To qualify, your business just needs to have $50,000 in annual income.
Other qualification requirements will vary depending on the type of loan you get. As a general rule of thumb, however, we recommend having at least six months’ time in business and a credit score of 600.
Working with Lendio gives you many of the same benefits as other brokers. Instead of having to apply separately to multiple lenders on your own, you can have a loan specialist from the Lendio team do the research for you in order to match you with the right loans. This can also serve as a way to confirm that the loan you think you need is best suited for your business.
To begin the application process with Lendio, you can visit the company’s website. Depending on the details of your application, you’ll be given additional instructions to provide supporting documentation.
1West: Best Online Lending Experience
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Rates & Terms | |
Starting Interest Rate | Varies by loan program |
Estimated APR | As low as 5%, but varies by loan program |
Loan Amount |
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Repayment Term |
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Repayment Schedule | Varies by loan program |
Funding Speed | As fast as 48 hours (2 weeks for equipment and AR financing) |
Financing Type | Working capital term loan, AR financing, credit line, equipment financing |
Qualifications | |
Credit Score | 500 (550 for equipment financing) |
Time in Business | 3 months (1 year for equipment financing; 2 years for AR financing) |
Revenue | $120,000 annually ($60,000 for working capital loans) |
Why We Like 1West
With 1West, you can get approved for a loan without the need to ever speak with a lending officer. This is made possible with the use of the company’s Automated Business Lending Engine (ABLE), which allows applications to be accepted 24/7 and can match you with over 50 different lenders in the company’s lending network.
1West also has flexibility in some of the loan terms it can offer. For example, loans can be structured to provide prepayment discounts. Reduced payment amounts during temporary periods of financial hardship are another option that can be granted. Well-qualified businesses may also be able to get on a repayment plan that requires less frequent monthly payments.
You can submit a loan application by visiting the 1West website. You can then set up access to an online portal to upload documents and check the status of your application. To streamline the process, we recommend having copies of your most recent business bank statements available as 1West will need them to verify your income. Alternative documentation—such as tax returns and cash receipts—are not accepted.
SBG Funding: Best for Unsecured Custom Financing Terms
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Rates & Terms | |
Starting Interest Rate | 1% to 4% per month; varies by loan program |
Estimated APR | Varies by loan program |
Loan Amount |
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Repayment Term |
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Repayment Schedule | Varies by loan program |
Funding Speed | As fast as same day, but varies by loan program |
Financing Type | Term loan, credit line, bridge capital, equipment financing, invoice financing |
Qualifications | |
Credit Score | 600 (650 for term loans) |
Time in Business | 6 months |
Revenue | $350,000 annually |
Why We Like SBG Funding
SBG Funding can provide tailored payment options to businesses. For this reason, we selected it as an excellent option if you’re looking for terms to suit your specific cash flow needs. Loans can be structured with varying payment frequencies and amounts, including the ability to get deferred payments for up to three months.
The company can work with businesses in a wide range of industries. Common industries include construction, healthcare, restaurants, retail, transportation, manufacturing, and automotive services.
SBG Funding touts a high approval rate of 85%, but borrowers interested in applying should be aware that meeting the minimum requirements will not guarantee approval. Compensating factors will likely be needed to offset any weaknesses in your business credit or finances.
Other perks offered by SBG Funding include prepayment discounts and financing renewals. With the exception of its SBA loans and equipment financing options, collateral is not a requirement in order to get funding.
To apply, visit the SBG Funding website, where applications can typically be completed within 10 minutes.
Smarter Finance USA: Best for Equipment Financing
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Rates & Terms | |
Estimated APR | 10% to 20% |
Loan Amount | $10,000 to $1 million |
Repayment Term | 24 to 60 months |
Repayment Schedule | Weekly, monthly, seasonal, and deferred |
Minimum Down Payment | $399 (documentation fee) to 35% |
Funding Speed | 2 to 4 days from time of application |
Financing Type | Equipment loans and leases |
Qualifications | |
Credit Score | None, but 600 is recommended |
Time in Business | None |
Revenue | None |
Why We Like Smarter Finance USA
Smarter Finance USA is a broker with nearly 40 lenders in its network, and it specializes in providing business vehicle and equipment financing. It’s also one of the very few companies with no hard minimum requirements for things like credit score, time in business, and revenue. Instead, it reviews applications on a case-by-case basis in an effort to maximize your approval odds and match you with a lender best suited for your circumstances.
It emphasizes transparency and honesty, and it will always focus on getting you the best product for your circumstances—even if it’s not with Smarter Finance USA. As one example, the company states that highly qualified businesses may be able to get lower rates and fees elsewhere through banks or SBA financing. Many of those options, however, come at the cost of a slower funding speed, so companies can still choose to work with Smarter Finance USA if funds are needed quickly.
To submit a loan application, you can visit the Smarter Finance USA website. Applications can normally be completed in under 10 minutes, after which you’ll be able to work with a loan representative to discuss the next steps.
Creditfy: Best Easy High Limit Credit Line
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Rates & Terms | |
Starting Interest Rate | 6.49% |
Estimated APR | 6.49% |
Loan Amount | Up to $2.5 million |
Repayment Term | 6 months to 3 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Financing Type | Line of credit |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months |
Revenue | $100,000 annually |
Why We Like Creditfy
Creditfy offers an easy application process for borrowers looking for a high limit business line of credit. Funds can be used for nearly any business-related purpose, giving you the flexibility of drawing funds whenever the need arises.
A standout feature of Creditfy is the fact that it requires all of its loan specialists to have a minimum of two years of industry experience. As a borrower, this ensures you’ll get the best level of guidance when it comes to selecting a loan. Creditfy also has a high approval rate of 90%, so companies that meet minimum qualification requirements are more likely to get funding.
Visit the Creditfy website to apply. Applications can be completed in under five minutes, after which a funding advisor will contact you to review your funding options. The company states that it provides funding to virtually all industries in the US and can issue funding within 24 hours.
Bluevine: Best Line of Credit for High Revenue Businesses
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Rates & Terms | |
Estimated APR | 7.8% |
Loan Amount | Up to $250,000 |
Repayment Term | 26 weeks or 12 months |
Repayment Schedule | Weekly and monthly |
Funding Speed | 24 hours |
Financing Type | Line of credit |
Qualifications | |
Credit Score | 625 |
Time in Business | 1 year |
Revenue | $120,000 annually |
Why We Like Bluevine
Bluevine is another lender on our list that offers a small business line of credit—and it is one of our top-recommended small business lines of credit due to its competitive rates.
Bluevine requires a minimum credit score of 625, time in business of one year, and an annual revenue of $120,000. Your business must also be structured as a corporation or LLC, be in good standing with your Secretary of State, and have no bankruptcies in the past three years. States that are ineligible for financing include Nevada, North Dakota, and South Dakota.
To qualify for the monthly payment plan, your business must meet additional requirements. You must have a credit score of 700-plus, have three years’ time in business, and earn $80,000 in monthly revenue.
You can start the application process on the Bluevine website. Applications can be completed in several minutes with no impact on your credit score. If eligible, you could receive a decision in as little as five minutes.
FundThrough: Best for Invoice Factoring
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Rates & Terms | |
Estimate of Fees |
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Estimated APR | 33% to 70% |
Loan Amount | $500 to $10 million |
Repayment Term | Up to 90 days |
Advance Rate | 100% |
Funding Speed | 2 to 5 days from time of application |
Factoring Contract Required? | No |
Financing Type | Invoice Factoring |
Qualifications | |
Credit Score | None |
Time in Business | None |
Revenue | None |
Why We Like FundThrough
If you’re looking for invoice factoring, FundThrough is an excellent option. It even made it to our list of the leading invoice factoring companies. Advance rates of up to 100% are available without any long-term factoring contracts, and you can get up to $10 million in financing.
For the best experience with FundThrough, you’ll need to integrate your account with QuickBooks or OpenInvoice. This gives you the option to select the invoices you’d like to receive funding for and is what allows the provider to issue funds as quickly as 24 hours. You will need to have outstanding invoices of at least $100,000 to one of your customers to be eligible.
You can visit the FundThrough website to submit an application. To ensure a more streamlined process, you should gather your business tax returns, articles of incorporation, business licenses, a government-issued photo ID, and a voided check containing your business bank account information.
How We Chose the Best Alternatives to Merchant Cash Advances
The lenders we selected as the best merchant cash advance alternatives were chosen using the following criteria:
- Cost of financing (interest rates and estimated APR)
- Financing type
- Loan amount
- Repayment term
- Qualification requirements for credit score, revenue, and time in business
- Application, approval, and funding speed
- Customer reviews and ratings
Why You Should Consider Alternatives to a Merchant Cash Advance
MCAs are typically only considered as a last resort because of its cost—which is also why alternatives are usually the better option for financing. They can also indirectly lead to other issues, such as negatively impacting your credit and your business finances. You can read our merchant cash advances guide to learn more about it and help you understand if it’s the best option for your business.
1. You can find cheaper financing options.
It’s not uncommon for an MCA to have an APR that exceeds 100%. This is because of the fees you must pay and its short repayment terms. MCAs typically charge a factor rate based on the amount of financing you need. For example, a factor rate of 1.25x on a loan of $10,000 means you would ultimately pay back 25% more, or $12,500.
2. You can preserve your credit rating.
By resorting to an expensive form of financing like an MCA, your business cash flow can be negatively impacted. This, in turn, can indirectly affect your company’s ability to make timely payments on your other debt obligations.
3. You can get a loan with longer repayment terms.
Other types of small business loans can offer repayment terms of five years or more. This includes equipment financing, working capital loans, and other term loans. With a longer repayment term, you can also get lower monthly payments which can help keep your business cash flow at higher levels.
Frequently Asked Questions (FAQs)
Most alternative funding options are cheaper than a merchant cash advance. An MCA is one of the most expensive forms of financing available, and while it may provide short-term financial relief, it can have long-term impacts on your company’s cash flow, credit, and finances.
Many alternatives to MCAs have flexible qualification requirements. Many of the lenders we selected in our guide have low credit score requirements, can issue funding to newer companies, or have low revenue requirements.
Many MCA alternatives can be funded in as little as 24 hours. However, this depends on the specific loan type, the financing terms you’re seeking, and the complexity of your business finances.
Bottom Line
As stated, MCAs are an expensive form of financing with short repayment terms. Before getting one, you should consider some alternative types of financing, as these can offer larger loan amounts, lower interest rates, lower monthly payments, and more.
If you need help with selecting the best financing for your needs, consider using a broker like Clarify Capital. It is our top recommendation because it requires only a low credit score, works with startups, and is a broker with over 75 lenders in its network. Find out more about it by visiting its website today.
