The best alternatives to a merchant cash advance (MCA) should provide a combination of better rates, fees, and repayment terms. Many of the best 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 six best merchant cash advance alternatives:
- Clarify Capital: Best overall for flexible qualifications
- Lendio: Best for low revenue businesses
- Bluevine: Best line of credit for quick access to funds
- 1West: Best online lending experience
- FundThrough: Best for invoice factoring
- Smarter Finance USA: Best for equipment financing
An MCA is an expensive form of financing that you should consider as a last resort if you cannot get funding elsewhere. If you’re concerned you may not qualify for a loan, I recommend reading our guide on how to get a small business loan. It contains what to expect throughout the loan process, what lenders look for, and how you can improve your chances of approval.
Best Merchant Cash Advance Alternatives at a Glance
Clarify Capital: Best Overall for Flexible Qualifications
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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 I 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, it made our list as the best option for flexible qualifications since many of its loan offerings are accepting of borrowers with limited credit history and time in business.
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. For a better overview, read our Clarify Capital review.
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 I Like Lendio
Lendio is another broker on our list and is similar to Clarify Capital in that it has over 75 lenders in its network. It makes our list as the best pick for businesses with low revenue earnings since it has some of the lowest annual revenue requirements within this guide. As such, it can be beneficial to businesses working on increasing their cash flow and needing financing options that allow them flexibility.
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 and to save you both time and money.
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.
Bluevine: Best Line of Credit for Quick Access to Funds
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Rates & Terms | |
Estimated APR | 7.8% and up |
Loan Amount | Up to $250,000 |
Repayment Term | 6 or 12 months |
Repayment Schedule | Weekly and monthly |
Funding Speed | 24 hours |
Financing Type | Line of credit |
Qualifications | |
Credit Score | 625 |
Time in Business | 12 months |
Revenue | $120,000 annually |
Why I Like Bluevine
Bluevine offers a small business line of credit and makes our roundup due to its competitive rates and terms. In fact, it’s one of our top-recommended small business lines of credit as it offers financing opportunities to various types of businesses needing quick access to working capital, since it has a simple application process and can offer funds within 24 hours if approved.
While it extends other loan types—such as business term loans and SBA loans—through its network of participating lenders, it offers its line of credit directly. It also has some of the most favorable starting rates in this guide when compared with other providers such as Lendio and Clarify Capital.
In addition to the qualification requirements above, your business must 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 are Nevada, North Dakota, and South Dakota.
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. You can read our Bluevine Line of Credit review for more detailed information on the application and approval process.
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 I Like 1West
With 1West, you can get approved for a loan without needing 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 providers in the company’s lending network. For these reasons, I chose it as the best pick for borrowers looking for a simple online lending experience.
Notably, 1West offers flexible qualification requirements for most of its loan offerings. In fact, it has one of the lowest credit score requirements of this guide, alongside Clarify Capital. It’s also comparable to Lendio with its low annual revenue requirements.
It 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, I 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.
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 | Varies |
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 I Like FundThrough
If you’re looking for invoice factoring, FundThrough is an excellent option. It even made our list of the leading invoice factoring companies. I chose it for this guide since it has advance rates of up to 100%, which are available without any long-term factoring contracts. While other lenders such as Clarify Capital also offer invoice factoring, FundThrough specializes in this form of financing and can offer expert advice.
For the best experience, 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, 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.
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 I Like Smarter Finance USA
Smarter Finance USA is a broker with nearly 40 lenders in its network. It makes our list since it specializes in providing business vehicle and equipment financing.
While other providers like 1West and Lendio also offer equipment financing options, Smarter Finance USA stands out in that it’s 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 to maximize your approval odds and match you with a lender best suited for your circumstances.
It emphasizes transparency and honesty and will always focus on getting you the best product for your circumstances—even if it’s not with Smarter Finance USA. As one example, it 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 apply, 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.
How I Chose the Best Alternatives to Merchant Cash Advances
The lenders I 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
- Ease of application
- Qualification requirements for credit score, revenue, and time in business
- Application, approval, and funding speed
- Customer reviews and ratings
Why You Should Consider Merchant Cash Advance Alternatives
MCAs are typically only considered as a last resort financing option due to their 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.
That said, here are some considerations as to why you should explore alternatives:
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.
You can use our merchant cash advance calculator to see just how much an MCA will cost you.
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)
Various forms of financing can act as an alternative to an MCA. This can include term loans, lines of credit, equipment financing, invoice factoring, and SBA loans. While an MCA may be easier to get, these options should be considered first as they are often cheaper overall.
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 selected in our guide have low credit score requirements, can issue funding to newer companies, or have low revenue requirements.
It can if you don’t meet the terms and conditions of the loan as agreed and the lender reports default. It can also indirectly impact your credit score by adding to your total debt obligations and can strain your cash flow if you already have a tight budget.
Bottom Line
If you require financing and are considering an MCA, it’s worth looking into various alternatives before entering into an agreement. Since MCAs are often an expensive form of financing with short repayment terms, you should evaluate whether or not other lending products such as a business loan or line of credit may be better suited for your business needs. In fact, these typically offer larger loan amounts, lower interest rates, and lower monthly payments.
