An MCA is fast and easy to qualify for — but it's often the most expensive money a business can take. Know the trade-offs before you sign.
The short version
- ✓An MCA buys future sales at a factor rate, repaid daily or weekly.
- ✓Speed and easy approval come at a high effective cost.
- ✓Cheaper alternatives are often available — check first.
How an MCA works
You receive a lump sum and repay it by remitting a fixed amount or percentage of sales, usually daily or weekly, until the agreed payback is met. Pricing uses a factor rate (e.g. 1.25), not an APR.
The real cost
That factor rate can translate to a very high effective APR, and daily remittances strain cash flow. Stacking multiple advances makes it worse.
Consider these first
- A business line of credit for flexible, lower-cost access.
- SBA or term loans if you can wait a little longer.
- Invoice or equipment financing tied to a specific asset.
If speed is the only option, borrow the minimum and have an exit plan. We can help you compare before committing.
QF
Written by the Qualify Finance Team
We help small business owners understand funding options, strengthen their profile, and get matched to the right lender — across every credit profile.