What Is a Small Business Cash Advance?
A small business cash advance (also called a merchant cash advance, or MCA) provides a lump sum of working capital in exchange for a fixed percentage of your future daily deposits. You receive money today and repay it automatically from your business bank account over a set period.
Unlike a bank loan, there's no monthly payment, no collateral requirement, and no 30-60 day approval wait. The cost is expressed as a factor rate (e.g., 1.25) rather than an annual interest rate: you repay $1.25 for every $1.00 you borrow.
Total repayment = $62,500
Daily holdback = 12% of deposits
If your account receives $5,000/day in deposits:
Daily repayment = $600
Estimated term = ~104 business days
Bank Loan: Credit-based, 680+ FICO, 30-60 days, collateral often required
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Qualification Requirements
Industries That Get Cash Advances
Get Your Cash Advance Today
5-minute application. No hard credit pull at application. Decision timing is set by the funding provider after review.
$10,000 to $1,000,000. All 50 states. Bank turndowns OK.
Frequently Asked Questions
What is a small business cash advance?
A small business cash advance is working capital provided in exchange for a percentage of future revenue. Repayment happens automatically via daily ACH debits: a fixed percentage of deposits. No fixed monthly payments, no collateral, 500 FICO minimum.
How much can I get?
Most businesses qualify for 75-150% of their average monthly deposits. A business with $20,000/month deposits typically qualifies for $15,000-$30,000. Amounts range from $10,000 to $1,000,000.
What credit score is needed?
500 FICO minimum. Soft pull to start: no impact on credit score from applying. Approval is based primarily on monthly deposits. Bank turndowns, tax liens, and prior bankruptcy do not automatically disqualify.
How fast can I get funded?
5-minute application. Decision and funding timing are set by the funding provider after reviewing your complete file.
What's the difference between a cash advance and a business loan?
A cash advance is revenue-based (approves at 500 FICO, funds once the provider approves your file, no collateral). A business loan is credit-based (requires 640-680+ FICO, takes 30-60 days, often requires collateral). Cash advances have higher factor rates: the tradeoff is speed and accessibility.
Related Resources
The Small Business Cash Advance Process: Step by Step
Basic business info, business bank account, and 6 consecutive months of bank statements. No hard credit pull at application stage. No impact to your personal credit.
T.A.G. reviews your bank deposits: not primarily your credit score. Our funders look at 6 consecutive months of revenue, average daily deposits, and consistency. Bank declines, tax liens, and prior bankruptcies do not automatically disqualify you.
You receive an offer showing: advance amount, total payback amount, factor rate, and daily/weekly remittance. No obligation to accept. You can review and ask questions before signing anything.
Wire transfer to your business bank account. Funding timing is set by the funding provider after review. Most businesses receive funds after signing.
How Much Does a Small Business Cash Advance Cost?
Cash advances use a factor rate: not an interest rate. A factor rate of 1.30 means you repay $1.30 for every $1.00 advanced. The cost is fixed regardless of how quickly you repay.
| Advance Size | Factor Rate 1.25 | Factor Rate 1.40 | Factor Rate 1.49 |
|---|---|---|---|
| $25,000 | Repay $31,250 | Repay $35,000 | Repay $37,250 |
| $50,000 | Repay $62,500 | Repay $70,000 | Repay $74,500 |
| $100,000 | Repay $125,000 | Repay $140,000 | Repay $149,000 |
| $250,000 | Repay $312,500 | Repay $350,000 | Repay $372,500 |
Your actual factor rate depends on your revenue, credit profile, and advance term. Rates shown are for illustration only. Use our free MCA calculator to estimate your specific cost.
A small business cash advance is not a loan. It is a purchase of future receivables. This distinction means MCA is not subject to state usury laws. Factor rates, when converted to APR, are typically higher than bank loan rates: often 40 to 200% APR depending on term length. T.A.G. recommends evaluating the total cost of capital against the ROI of the capital use before accepting any offer. See MCA Pros and Cons for a full transparency overview.
Small Business Cash Advance FAQ
- What is a small business cash advance?
- A small business cash advance (also called a merchant cash advance or MCA) is a lump sum of working capital provided to a business in exchange for a percentage of future revenue. Repayment happens automatically via daily or weekly ACH debits from your business bank account: a small fixed percentage of deposits. There are no fixed monthly payments, no collateral required, and no minimum credit score above 500 FICO.
- How much can I get with a small business cash advance?
- Most businesses qualify for 75-150% of their average monthly bank deposits. A business with $20,000/month in deposits typically qualifies for $15,000-$30,000 on a first advance. Amounts range from $10,000 to $1,000,000 depending on your revenue history. Businesses with consistent, verifiable deposits qualify for higher amounts.
- What credit score do I need for a business cash advance?
- 500 FICO is the minimum. Approval is based primarily on monthly bank deposits, not credit score. Business owners with credit scores as low as 500 qualify if their business deposits $4,000+ per month and has 6+ months of operating history. Bank turndowns, tax liens, and prior bankruptcies do not automatically disqualify.
- How fast can I get a small business cash advance?
- Applications take 5 minutes. Decision and funding timing are set by the funding provider after reviewing your complete file.
- What is the difference between a business cash advance and a business loan?
- A business loan is a fixed-sum debt with monthly payments and interest. A cash advance is a purchase of future revenue: repaid as a percentage of daily deposits with no fixed schedule. Cash advances have no collateral requirement and approve at 500+ FICO (vs 640-680 for loans); funding timing is set by the provider after review, while bank loans typically take 30-60 days. Factor rates are higher than loan interest rates, but the speed and accessibility tradeoff is the primary reason businesses choose cash advances.