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MCA Glossary & FAQ
MCA funding may not be the right answer for your particular situation. Review the FAQ thoroughly and if you still have questions - schedule a FREE Call below.
A system for electronic bank transfers. With MCA repayment, fixed amounts can be automatically withdrawn from your account.
A repayment method where a percentage of your daily card sales is automatically withheld through your processor.
A fixed multiplier used to calculate the total repayment amount. For example, a $10,000 advance with a 1.3 factor rate means you’ll repay $13,000.
A lump-sum advance based on your future business revenue. It’s not a loan — it's a purchase of future receivables.
Your future business revenue (like card sales or invoices). In an MCA, a funder is buying the rights to a portion of those receivables.
Another term for the holdback percentage—the portion of daily sales withheld for MCA repayment.
Stacking refers to taking out multiple Merchant Cash Advances (MCAs) at the same time, or before fully repaying an existing one. While it may provide short-term access to more capital, it can quickly lead to cash flow issues and increased financial strain. It's important to carefully evaluate your ability to manage multiple payments before considering this option.
A specialist who reviews your documents and financials to determine if you qualify for funding and under what terms.
Cash used for daily operations like payroll, inventory, marketing, or emergency expenses — the kind of funding MCAs are designed to provide.
Yes, alternatives include traditional bank loans, business lines of credit, invoice factoring, and equipment financing. Each option has its own qualifications, terms, and benefits, so it's advisable to compare them to determine the best fit for your business needs.