MCA Guide
Everything you need to know about Merchant Cash Advances and how to succeed as a broker.
What is an MCA?
A Merchant Cash Advance (MCA) is a type of business financing where a company receives a lump sum of capital in exchange for a percentage of future sales or receivables.
Unlike traditional loans, MCAs are based on future revenue rather than credit scores, making them accessible to businesses that may not qualify for conventional financing.
Required Documents
- 3-6 months of business bank statements
- Valid government-issued ID
- Voided business check
- Business tax returns (some lenders)
- Proof of business ownership
Key Terms to Know
- Factor Rate: The multiplier applied to the advance amount to determine total repayment.
- Holdback: The percentage of daily sales withheld for repayment.
- Position: Whether the MCA is first, second, or third in line for repayment.
- Stacking: Having multiple MCAs at the same time.