Merchant Cash Advances (MCAs) provide quick funding to businesses in need of working capital. However, one major factor influencing MCA approval and terms is business credit. While some lenders emphasize revenue over credit scores, a strong credit history can lead to better rates, higher funding limits, and flexible repayment terms.
In this guide, we will explore the role of business credit in securing an MCA, compare funding options from OnDeck, National Business Capital, and Capital Express LLC, and help you determine the best approach for your business financing needs.
Understanding Merchant Cash Advances (MCAs)
An MCA is a financing option where businesses receive an upfront lump sum in exchange for a percentage of future sales. Unlike traditional loans, MCAs are more accessible but often come with higher costs. Business credit plays a key role in determining MCA eligibility, repayment terms, and funding amounts.
Key Features of an MCA:
- No fixed monthly payments—repayment is based on daily or weekly sales.
- Quick approval, often within 24–48 hours.
- Higher costs compared to bank loans but easier qualification.
- Suitable for businesses with consistent credit card sales.
The Role of Business Credit in MCA Approval
While MCAs are often marketed as “credit-friendly,” lenders still consider business credit scores to assess risk. Here’s how business credit impacts the process:
1. Approval Rates & Eligibility
- Strong Business Credit (700+): Higher approval rates, better terms, and access to larger funding amounts.
- Fair Credit (600–699): Eligible for MCAs but with higher fees and shorter terms.
- Poor Credit (<600): Limited options; may require higher revenue or collateral.
2. Factor Rates & Cost of Funding
- Businesses with high credit scores receive lower factor rates (e.g., 1.10–1.25).
- Lower credit scores may face factor rates of 1.30–1.50, leading to higher repayment costs.
3. Repayment Flexibility
- Businesses with good credit may qualify for weekly or monthly repayment options.
- Poor credit applicants may be restricted to daily repayments, impacting cash flow.
Comparison: OnDeck vs. National Business Capital vs. Capital Express LLC
Feature | OnDeck Small Business Loans | National Business Capital | Capital Express LLC |
Funding Speed | 24–48 hours | 1–3 business days | 24 hours |
Business Credit Requirement | 625+ recommended | Flexible, case-by-case | 580+ accepted |
Loan Amount | $5,000–$250,000 | $10,000–$5M | $5,000–$500,000 |
Repayment Terms | Daily/weekly | Daily/weekly/monthly | Flexible options |
Interest/Factor Rate | 1.11–1.45 | 1.09–1.40 | Competitive, tailored rates |
Best For | Established businesses with fair credit | Businesses needing large funding | Businesses with all credit levels |
Why Choose Capital Express LLC?
Unlike OnDeck and National Business Capital, Capital Express LLC provides customized MCA solutions based on your business needs. We accept a wider range of credit scores and offer more flexible repayment options, ensuring that small businesses receive the funding they need without excessive fees.
How to Improve Your Business Credit for Better MCA Terms
If your credit score is limiting your MCA options, take these steps to improve it:
- Pay Down Existing Debt: Lower outstanding balances to improve credit utilization.
- Monitor Your Credit Reports: Check for errors and dispute inaccuracies.
- Establish Trade Credit: Work with vendors who report to credit bureaus.
- Make On-Time Payments: Avoid late payments on loans and credit accounts.
- Diversify Credit Accounts: Maintain a mix of credit lines to strengthen your profile.
Final Thoughts: Finding the Right MCA Provider
Your business credit significantly affects your MCA approval, cost, and repayment flexibility. While lenders like OnDeck and National Business Capital offer various funding options, Capital Express LLC provides tailored solutions for businesses of all credit levels.
If you’re looking for a fast, flexible, and affordable MCA, contact Capital Express LLC today to explore your options!
Need funding? Apply today and get approved within 24 hours!