What Is a
Merchant Case Advance?

A merchant cash advance or MCA is a lump sum of capital lent against a business’s future sales.

By definition, business cash advances are short-term and are repaid through smaller daily (or weekly) payments until the total advance and lender fees are paid in full.

A small business can apply for an MCA and have an advance deposited in its account quickly.

When to Consider ?

A merchant cash advance is a go-to resource for business owners in need of cash now. In business, expenses and opportunities arise unexpectedly. But sometimes, traditional financing just isn’t in the cards—whether it’s a matter of timing, credit score or years in business. With this substitute to traditional small business loans, you can acquire the capital you need now to act on an opportunity or keep your operations running.

How do Merchant Case
Advance Work

Merchant cash advances work differently depending on the type of advance you choose.

In its traditional form, merchant cash advances are suitable for businesses that deal with large volumes of debit and credit card transactions. Today, the product has evolved into a second program that can benefit any small business.

The difference boils down to how the advance is repaid and how an MCA lender assesses rates and fundability.

Traditional Merchant
Case Advance

In a traditional cash advance agreement, a lender will deduct a percentage of your credit or debit card sales on a daily or weekly interval. The process is known as a “holdback.”


The repayment period typically ranges from 3 to 24 months, though there’s no set-in-stone end date. The higher your credit card sales, the faster you’ll pay the advance off.


Say your lender holds back 15-percent of your daily credit card and debit card transactions. As your sales rise and fall, so do your MCA payments.

With a merchant cash advance, your payment will shift to the pace of your income, helping you avoid cash flow disruptions when sales are down.

Traditional Case Advance Requirments

MCA lenders determine advance amounts based on projected credit and debit card sales. Whereas the holdback percentage is calculated on the advance amount and the expected payback time. Typical holdback rates fall within the 10 to 20 percent range, though this can vary widely based on the business and risk.

ACH Advance Case Requirements

The second variation of a merchant cash advance is known as an ACH MCA, or an automated clearing house withdrawal. In this agreement, payments to MCA lenders are fixed and occur over a set term. This means your daily or weekly payment will remain the same regardless of your sales volume. Funds are drawn automatically from a business owner’s linked bank account.

ACH Merchant Case Advance Requirment

ACH advances are based on a business’s total projected revenue, not on credit card or debit card transaction totals alone. As a result, this type of business advance is applicable to all small business owners—not just those with high credit and debit card sales.