Quick Answer

SBA loans are almost always cheaper than MCAs in total dollar cost. A typical SBA 7(a) loan at 10.5% APR on $100,000 over 5 years costs approximately $27,500 in total interest. A typical MCA with a 1.30 factor rate on $100,000 costs $30,000 total, but is repaid in 6-12 months, not 5 years. The key difference is speed and qualification: SBA loans take 30-90 days to fund and require strong credit/collateral.

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Business Loan Comparison Calculator

Compare the true cost of merchant cash advance, SBA loan, business credit card, and line of credit side-by-side. Enter your funding need and see real numbers.

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$5,000-$5,000,000
Typical range: 1.15-1.45
Typical: 6-18 months
Typical range: 10-13% (2026)
SBA 7(a): 24-120 months
Typical biz card: 20-28%
How long to pay card balance?
Typical LOC: 8-22%
How long to pay LOC balance?
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On a $100,000 example, SBA total interest runs lower than MCA total cost, but over a much longer term A bar chart comparing a $100,000 SBA 7(a) loan's approximately $27,500 total interest over 5 years to a $100,000 MCA at a 1.30 factor rate's $30,000 total cost repaid in 6 to 12 months. $100,000 Example: Total Cost vs. Repayment Term SBA 7(a) Loan ~$27,500 / 5 years MCA (1.30 factor) $30,000 / 6-12 months Similar total dollar cost, but the SBA loan is spread across a term roughly 5-10x longer.
A cafe worker ringing up a customer order on a touchscreen till at the counter
Every option in this calculator gets repaid out of days like this one, whether it is a daily MCA remittance or a monthly SBA payment.

Quick Reference: All Financing Types Compared

Business Loan Comparison Calculator 2026: MCA vs SBA vs Credit Card vs Line of Credit, Comparison Table (2026)
Factor MCA SBA 7(a) Loan Business Credit Card Line of Credit
Funding Speed Provider-Set Timeline 30-90 days 3-14 days (card delivery) 7-21 days
Min. Credit Score 500 FICO 640-680+ FICO 600-680+ FICO 640-720+ FICO
Min. Time in Business 6 months 2+ years typical 1+ year preferred 2+ years typical
Collateral Required None Often required None Sometimes
Bank Decline OK Yes No No No
Tax Liens OK Often Rarely No No
Total Cost (relative) Medium-High Lowest High (if carried) Medium
Repayment Structure Daily/weekly holdback Fixed monthly payments Min. monthly payment Interest only or amortizing
Early Repayment Benefit No: cost is fixed Yes: saves interest Yes: saves interest Yes: saves interest
Max Amount (typical) Up to $5M Up to $5M $5,000-$100,000 $10,000-$500,000
Best For Fast capital, challenged credit, revenue-dependent businesses Long-term low-cost capital, strong credit, stable business Small short-term needs, 0% intro offers, rewards Revolving needs, strong credit, 2+ year businesses
Minimum FICO threshold by financing type, from MCA's 500 to a bank line of credit's 720+ A bar chart comparing minimum credit score thresholds: MCA at 500 FICO, business credit card at 600 to 680 or higher, SBA 7(a) loan at 640 to 680 or higher, and business line of credit at 640 to 720 or higher. Minimum FICO Threshold by Financing Type MCA 500 FICO Credit Card 600-680+ FICO SBA 7(a) 640-680+ FICO Line of Credit 640-720+ FICO

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The right answer usually comes down to timing and credit, not just the headline cost: an SBA loan can be cheaper and still be the wrong tool if the need is this week.

Frequently Asked Questions

What is the cheapest business financing option?
SBA loans are almost always the cheapest option in total dollar cost for businesses that qualify. A typical SBA 7(a) loan at 10.5-11% APR costs roughly 28-30% of the loan amount over a 5-year term. The tradeoff: SBA requires 640+ credit, 2+ years in business, no major derogatory events, and takes 30-90 days to fund. If you qualify for an SBA loan, it's usually the right choice for large, long-term capital needs. If you don't qualify, or need money faster than SBA can provide, MCA is the fast, accessible alternative.
Is a merchant cash advance worth it?
An MCA is "worth it" when the business value of having capital now exceeds the total cost of the advance. If you can make $50,000 in new contracts, purchase discounted inventory, or prevent a $30,000 penalty by accessing $40,000 in capital that costs $10,000 total, the math is clear. MCA is expensive compared to bank loans but accessible to businesses that can't get bank loans. The right question is: "What does having this capital allow me to do, and does that value exceed the cost?"
How is MCA calculated vs. a loan with interest?
Loans use interest rates (percentage of outstanding balance per period). A $100,000 loan at 10% APR costs $10,000/year in interest, and if you pay it off early, you pay less total interest. MCA uses a factor rate: a flat multiplier applied once to the original advance amount. A $100,000 MCA at 1.30 factor rate costs $30,000 total, regardless of how fast you repay. There is no "interest savings" from early payoff on a traditional MCA. You pay $130,000 whether you repay in 4 months or 12 months.
Can I negotiate the factor rate on an MCA?
Yes, to a limited degree. Factor rates are determined by underwriting, but ISO brokers (like T.A.G.) can often improve the rate by submitting your application to multiple funders and leveraging competing offers. The strongest negotiating lever is competing term sheets: if two funders offer 1.29 and 1.33, you can use the 1.29 offer as leverage. Factors that improve your rate: higher monthly revenue, longer business history, cleaner bank statement (fewer NSFs), strong first-position deal history, and shorter requested term.
What credit score do I need for a business line of credit?
Traditional bank LOCs typically require 680-720+ personal FICO, 2+ years in business, and annual revenue above $250,000. Online LOC providers (Kabbage, Fundbox, BlueVine) have lower thresholds: some approve 600+ FICO with 12+ months in business. If your credit score is below 640 or you've been declined by banks, a merchant cash advance is likely your most accessible working capital option while you build your credit profile toward LOC eligibility.

Related tools and resources:

MCA Cost Calculator Factor Rate → APR Working Capital Calc MCA vs SBA Guide All Resources

More Business Loan Comparison FAQ

Is a business line of credit better than an MCA?
A business line of credit is generally less expensive than an MCA for businesses that qualify for one. LOCs carry interest only on the drawn balance and can be drawn and repaid repeatedly. The problem: bank LOCs require 680+ credit, 2+ years in business, and clean financials, and approval takes 2-4 weeks. MCA qualifies with 500 FICO, 6 months in business, and funds once the provider approves your file. For businesses that can qualify for an LOC, it's usually the better choice. For those that can't, MCA is the accessible alternative.
Should I use a business credit card or MCA for working capital?
For small, short-term needs (under $20,000) and if you can pay the balance within 30 days, a 0% intro APR business credit card can be cheaper than an MCA. For larger amounts ($30,000+), longer needs, or if you'll carry a balance, MCA is often more predictable. Business credit cards have variable APRs that can reach 24-28% annualized; an MCA factor rate of 1.25-1.35 on a 6-month term has a similar effective APR but a predictable total cost known at signing.