Merchant Cash Advance Online Vs Business Loans

Posted by: | Posted on: May 19, 2018

Is your business looking for some kind of quick finance? You might be thinking of a business loan but you might not be provided with it. Basically, small businesses might not be considered eligible for business loans. This is when businesses can go for merchant cash advance loans. MCA can be great for businesses that are looking to expand. However, one should go through the basic differences between merchant cash advance online vs business loans. Only then one would be able to understand why MCA is better than business loans.

merchant cash advance online

Understanding the Terms

Many businesses might not have a proper idea about MCA as businesses are acquainted with the term ‘business loans’. Hence, it is very important to define the terms and help others understand it in a better way.

1. Merchant Cash Advance

A MCA (Merchant Cash Advance) is not any kind of loan. Instead, it is a type of an advance that is provided to businesses against their future credit card sales. The borrower can repay the whole amount of advance slowly as there is no fixed time-frame.

2. Business Loans

On the other hand, business loan is a type of a loan that is given especially for business purpose. It is a debt which the borrower is compelled to repay after a fixed period of time.

They Are Different

From the above definition of the terms, one can easily understand that there is a difference between merchant cash advance online and business loans. However, you will be able to know the contrast in details simply by following the blog.

  • Qualification

When one opts for an MCA, providers will go through the current credit card sales. They will consider if the borrower can repay the whole amount. If they feel the borrower can repay they will give the advance. On the other hand, bank lenders will also go through credit card ratings, tax records, and good credit card history in order to provide loan.

  • Speed

Another major difference between merchant cash advance online and business loans is the approval time. Once the MCA provider approves the agreement, the money gets transferred to the bank account within one week. However, bank loans in order to get approved can take one month.

merchant cash advance online

Interest Rates

Technically speaking, MCA is not a loan. Hence, there are many ways through which the interest rate can be structured. On the other hand, business loans come with a fixed interest rate.

Repayment Terms

Before opting for MCA, one should try to know about the repayment terms associated with merchant cash advance online vs business loans. There is no fixed payback schedule for MCA. Basically, one needs to repay according to their credit card sales. However, for business loans, one needs to repay it within a fixed time frame.


For getting an MCA, one doesn’t need to submit any form of collateral.  However, for business loans, one needs to submit collaterals.

Even if you have understood the basic distinction between merchant cash advance online vs business loans, which option would be the best for your business, would really depend on the type of business you are running. So business entrepreneur should consider their business needs and then opt for the financing options that are suitable for them.

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