Merchant Cash Advance
A merchant cash advance (MCA) is fast working capital you repay automatically from a set share of your ongoing sales, rather than in fixed monthly installments. At Custom Capital Advisors we call this a revenue advance, because that is a clearer name for the same product, and it tends to fit businesses with steady card or bank-deposit revenue that need capital quickly. We are a financing brokerage, not a lender. We help you decide whether this is genuinely the right tool, connect you with the right funder, and make sure you understand the cost before you commit.
What is a merchant cash advance?
A merchant cash advance is not a traditional loan. Instead of borrowing a lump sum and repaying it with interest over a fixed schedule, you receive an advance of capital and repay it from a percentage of your future sales until the agreed amount is met. Because repayment flexes with your revenue, it moves faster and leans more on your sales history than on collateral or a perfect credit profile. It is the same product many in the industry label an MCA. We prefer "revenue advance," because the name describes what actually happens: you are advancing against your own revenue.
How does a merchant cash advance work?
You and the funder agree on an advance amount and a repayment amount. Repayment is then collected as a fixed percentage of your daily or weekly sales, or as a set periodic draw tied to your revenue, until the balance is satisfied. When sales are strong you repay faster; when they slow, the payment amount moves with them. That built-in flexibility is the appeal. The trade-off is cost, which is where an honest advisor matters most.
What does a merchant cash advance cost?
A merchant cash advance is usually priced with a factor rate rather than an interest rate. You repay the advance multiplied by that factor, so an advance carries a fixed total cost rather than an ongoing APR. Because the money is fast and flexible and leans on sales rather than collateral, that cost is typically higher than longer-term financing. Factor rates and fees vary by funder and by your business's revenue and risk profile. We present them as typical ranges, never a promised number, and we walk through the true cost of capital with you so there are no surprises. If a cheaper product would serve you as well, we will tell you.
Who is a merchant cash advance right for?
A revenue advance tends to fit when you have consistent sales but need capital quickly, when your need is short-term and tied to a clear return (buying inventory for a busy season, covering a timing gap, taking on a large order), and when a bank timeline does not work for the moment. It rewards steady revenue over perfect credit, which is why it reaches businesses that a conventional loan might not.
Does a merchant cash advance require a personal guarantee?
No. The advances we place, which we call revenue advances, do not require a personal guarantee. The advance is underwritten against the business and its future receivables rather than against you, so your personal assets are not pledged behind it. That is a real structural difference from a bank term loan or an SBA loan, where a personal guarantee is standard. If a personal guarantee is the thing holding you back on an offer you are weighing, this is worth putting side by side with it before you decide. Our guide to personal guarantees on business loans covers where they do and do not show up across products.
Do you need collateral for a merchant cash advance?
Generally not in the traditional sense. A revenue advance, which is what we call this product, is repaid from a share of your incoming sales, so the future revenue is what supports it rather than a specific piece of equipment or property pledged as security. That is a large part of why it funds quickly. It is also why the cost of capital tends to be higher than a secured term loan, which is a tradeoff worth making deliberately rather than by accident. If you do have assets you would rather borrow against, asset-based financing is usually the better conversation.
What credit score do you need for a merchant cash advance?
There is no single cutoff, and any advisor who quotes you one before reading your file is guessing. A revenue advance weighs consistency of deposits far more heavily than a credit score, which is why it is often workable for businesses that a bank has already declined. Credit still affects what structures are available to you and what they cost. What matters more in practice is how steady your monthly revenue is and how many other obligations are already drawing against it. See what lenders look for for the fuller picture.
How are merchant cash advance payments actually taken?
Usually as a fixed percentage of daily or weekly card and bank deposits, sometimes called a holdback, rather than a flat monthly amount. When sales slow, the dollar amount taken slows with them; when sales rise, you repay faster. That flexibility is the point of the structure, and it is also the thing to model honestly before you sign, because a strong month accelerates the payoff and shortens the effective term.
When a merchant cash advance is the wrong fit
We will say this plainly, because it is where businesses get hurt. A merchant cash advance is not a way to dig out of debt you already cannot carry. If you are already repaying one or more advances and are looking to stack another on top, or to take a large advance to clear existing balances, that usually deepens the hole rather than filling it. We do not chase or encourage that. If that is the situation, the honest move is to step back and talk through real options first, which may mean a different product entirely, or a plan that does not add cost. That conversation is exactly what an advisor who is on your team is for.
Merchant cash advance vs other financing
A revenue advance is often the right call when speed and revenue-based repayment matter most. It is usually the wrong call when the need is ongoing or the cost of a faster product is not worth it. If you want capital you can draw and repay repeatedly, a business line of credit is often a better structure. If you want the lowest ongoing cost and can wait, a business term loan usually costs less over time. Part of our job is telling you when one of those fits better than an advance does.
Why we call it a revenue advance
Same product, clearer name. "Merchant cash advance" carries baggage from a corner of the industry that has not always treated business owners well. We use "revenue advance" because it describes the mechanics honestly and sets the right expectations: you are advancing against your revenue, with a cost you understand up front. If you searched for a merchant cash advance and landed here, you are in the right place. For the plain-language definition, read our what a merchant cash advance actually is. We just hold the product to a higher standard.
Common Questions
Ready to talk it through?
If you are considering a merchant cash advance, let's make sure it is the right fit and that the cost makes sense before you commit. No pressure, no promises about rates or approval, just a straight read on your options. Start a conversation or learn how our capital consulting works.
Last updated: August 14, 2026