How a United States Merchant Cash Advance Works
An MCA is technically not a loan — it is a purchase of future revenue at a discount. The discount factor is the cost.
Repayment happens automatically through one of three structures: 1. ACH pull from your business bank account on a fixed schedule (daily/weekly/monthly) 2. Lockbox arrangement where deposits are routed first to repay the advance 3. Split processing where your card processor sends a portion of each batch to the MCA holder
When an MCA Makes Sense for United States Operators
- Inconsistent revenue: when fixed-payment loans would crush you in slow months
- Bank rejection: when you have already been turned down by banks
When an MCA Does NOT Make Sense
- When you have substantial assets that could collateralize a lower-cost product
- When you can negotiate vendor terms or factor receivables more cheaply
MCA Pricing in United States
Term length is usually 3-18 months.
Always confirm total dollar cost before signing.