How an advance is repaid
With a merchant cash advance the business receives a lump sum and repays it through frequent small debits tied to its revenue, usually daily or weekly rather than monthly. Because the repayment follows the cadence of the money coming in, a strong week moves it faster and a weak week still has a debit. Check this against your own deposit history before choosing it.
Where the speed matters
Small businesses often cannot wait on a long application when a decision is due this week. Wikipedia describes a diversified service economy: tourism, financial services, high technology, professional services. A caterer who lands a corporate event, a retailer ahead of the holidays or a studio fixing a flooded unit may all need cash quickly, and a faster process than a conventional loan application can be the reason an advance is considered.
Advance versus the alternatives
| Question | Merchant cash advance | Alternative to compare |
|---|---|---|
| How is it repaid? | Small frequent debits from revenue | Term loan: scheduled fixed payments |
| What if the need repeats? | Each new advance is a new decision | Line of credit: draw and repay |
| What if revenue is seasonal? | Debits continue in slow weeks | Revenue-based financing: payment tied to revenue |
A worked example, for illustration only
Round numbers, not our terms: a shop owner needs $40,000 for a holiday inventory order. Sales of about $20,000 a week are expected to run through the busy period, and the order should sell through in roughly six weeks. The owner's real question is not the headline amount but the weekly drag: how much of each week's revenue goes out in debits, and what is left for rent, payroll and restocking. If the answer is still comfortable in the weakest week of the period, the plan is sound. If the margin disappears, the order is too big or the product is wrong.
Use it for a defined, short-horizon purpose
The best fits are specific: a bulk inventory order with a known sell-through, a repair that restores a revenue-producing machine, a seasonal build-up. The worst fit is covering a structural shortfall, because the debit then becomes one more cost the business cannot afford. If you already carry advances and they are the problem, read about MCA relief first.
How to apply
We consider FICO scores of 500 and above, ask for about three months of business bank statements and need no tax returns. The application takes about five minutes with a soft credit pull. Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours. Sole proprietors can apply. Apply now, or see the wider San Francisco funding overview.