2 min read
Definition
A merchant cash advance (MCA) is a lump sum advanced against a business's future card sales, repaid automatically as a fixed percentage of every card transaction. Repayment flexes with takings — more on busy days, less on quiet ones — which suits card-led retail and hospitality. It is priced with a factor rate rather than an APR.
The flexibility is real, but MCAs are usually expensive once the factor rate is annualised. Compare against a short-term loan or revolving line first — see MCA vs a business loan and alternatives to an MCA.
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