Question 1

ACH (Automated Clearing House)

Accepted Answer

A system for electronic bank transfers. With MCA repayment, fixed amounts can be automatically withdrawn from your account.

Question 2

Credit Card Split (Merchant Withhold)

Accepted Answer

A repayment method where a percentage of your daily card sales is automatically withheld through your processor.

Question 3

Factor Rate

Accepted Answer

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.

Question 4

MCA (Merchant Cash Advance)

Accepted Answer

A lump-sum advance based on your future business revenue. It’s not a loan — it's a purchase of future receivables.

Question 5

Receivables

Accepted Answer

Your future business revenue (like card sales or invoices). In an MCA, a funder is buying the rights to a portion of those receivables.

Question 6

Retrieval Rate

Accepted Answer

Another term for the holdback percentage—the portion of daily sales withheld for MCA repayment.

Question 7

Stacking

Accepted Answer

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.

Question 8

Underwriter (Underwriting)

Accepted Answer

A specialist who reviews your documents and financials to determine if you qualify for funding and under what terms.

Question 9

Working Capital

Accepted Answer

Cash used for daily operations like payroll, inventory, marketing, or emergency expenses — the kind of funding MCAs are designed to provide.

Question 10

Are there alternatives to MCAs for business funding?

Accepted Answer

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.

MCA Glossary & FAQ

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MCA Glossary & FAQ

Let’s keep you in the loop. Get insider updates on funding opportunities, brand partnerships, digital growth strategies, and creative releases — all designed to help you thrive.

Let’s keep you in the loop.
Get insider updates on funding opportunities, brand partnerships, digital growth strategies, and creative releases —
all designed to help you thrive.