Section 1: Introduction
Merchant Cash Advances (MCAs) offer a unique financing option for businesses in need of quick cash. Unlike traditional loans, MCAs are structured as a sale of future credit card sales or bank deposits
at a predetermined factor rate. For instance, if a business receives an MCA of $50,000 with a factor rate of 1.2, they would repay the advance plus a fee through a percentage of their daily credit card sales until the total repayment amount is reached.
Section 2: Underwriting Process
The underwriting process for MCAs typically involves a review of the business’s financial health, including credit card sales history and bank statements. For example, a merchant might need to provide at least