When you’re running a business, there will be times when you need fast capital — to cover payroll, expand inventory, invest in marketing, or handle seasonal dips. Merchant Cash Advances (MCAs) have become a go-to funding solution for many small businesses because of their speed and flexibility.
But have you ever wondered how MCA lenders decide how much to offer you, or how they calculate repayment terms? At Capital Express LLC, we work with trusted lenders to match you with the right financing — and in this blog, we’ll demystify the process for you.
What is an MCA Loan?
A Merchant Cash Advance isn’t a traditional loan. Instead of lending you money based on your credit score alone, an MCA provider purchases a portion of your future credit card sales or business revenue.
In simple terms:
- You get a lump sum upfront.
- You repay via a fixed percentage of daily or weekly sales until the total is paid back, including the lender’s fees.
How Do MCA Lenders Calculate Loan Amounts?
Wondering how MCA Lenders calculate the loan amount? When MCA lenders assess your business, they don’t focus on collateral or high credit scores like banks do. Their decision-making hinges on one thing: Your Business’s Cash Flow.
Here’s what most MCA lenders evaluate:
Monthly Revenue Stability
The higher and more consistent your monthly revenue, the more you can qualify for. Lenders typically want to see:
- $10,000+ in monthly sales.
- At least 3-6 months of steady income.
Credit Card Sales Volume
Because MCAs are often repaid through a percentage of your credit card transactions, the volume of these transactions matters. If your business processes a lot of card payments, you’ll likely qualify for a higher advance.
Business Bank Statements
Lenders review your recent business bank statements (usually 3-6 months) to check for:
- Frequent deposits.
- Low NSF (non-sufficient funds) activity.
- Healthy end-of-month balances.
Time in Business
Most MCA lenders prefer that your business has been operational for at least 6 months to 1 year. The longer your track record, the better your chances of approval.
Industry Risk Profile
Certain industries are considered riskier than others. For example:
- Retail, restaurants, and seasonal businesses are common MCA users.
- High-risk industries (like adult entertainment or cannabis) may have fewer funding options or higher factor rates.
How Do MCA Lenders Set Repayment Terms?
Repayment terms in MCA agreements are not like traditional loans. Here’s what you can expect:
The Factor Rate
Instead of interest rates, MCAs use a factor rate — usually between 1.1 and 1.5.
Example:
If you receive $50,000 at a 1.3 factor rate, you’ll repay $65,000 ($50,000 x 1.3).
Holdback Percentage
The repayment is done via a daily or weekly deduction from your business revenue — called the “holdback.” This typically ranges from 10% to 20% of daily credit card sales or total deposits.
Repayment Duration
Depending on your sales volume, MCA repayment usually completes within 3 to 12 months. The faster your business earns, the quicker you repay. If your sales slow down, your payments shrink too.
Real-World Example:
Let’s say your business averages $40,000 in monthly revenue.
You’re offered a $30,000 MCA with:
- Factor rate of 1.3
- Holdback rate of 15%
You’d repay $39,000 total over time. If you’re earning $2,000 a day, your daily payment would be about $300. If sales slow, the payment adjusts — offering flexibility that traditional loans don’t.
Why Businesses Prefer MCA Lenders Over Traditional Banks
Fast funding — approval in 24-48 hours. No collateral required. Flexible repayment linked to real sales. Accessible to businesses with bad credit.
At Capital Express LLC, we help you connect with lenders who offer transparent terms, competitive factor rates, and no hidden fees.
Capital Express LLC’s Approach to MCA Lending
We don’t just connect you with any MCA lender — we work with trusted, vetted providers who prioritize:
- Fair and clear repayment terms.
- Personalized offers based on your real revenue.
- Flexible funding from $5,000 to $500,000.
Our goal is to help you grow, not trap you in a debt cycle.
Is an MCA Right for You?
Ask yourself:
- Is your business generating steady monthly revenue?
- Do you need fast access to capital?
- Can your business handle fluctuating repayment amounts based on sales?
If the answer is yes, an MCA could be a strong short-term funding solution.
Ready to Explore MCA Loans?
Let Capital Express LLC help you secure the capital you need without the paperwork headaches and long wait times of banks.
Get started today!
Visit: https://www.capitalexpressllc.com
Email: support@capitalexpressllc.com
