MCA Glossary & FAQ

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 With MCA repayment, fixed amounts can be automatically withdrawn from your account.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.

No hard credit pull is required, and funding is based primarily on business revenue. A soft credit check may be required, but that will not hurt your credit.

Typically within 24–48 hours once your documents are submitted.

Small daily, weekly, or bi-weekly payments are automatically deducted from your business bank account or as a percentage of your card sales.

You may still qualify. We work with businesses that traditional lenders turn down.

Funding typically ranges from $5,000 up to $1,000,000 based on your monthly revenue. We typically fund 2 x your monthly gross.

A Merchant Cash Advance is not a loan. It’s an advance on your future business sales — meaning a funding company purchases a portion of your projected revenue at a discount and collects payments over time. What does it mean when an MCA is “offered at a discount”? When you get an MCA, you receive less money upfront than you’ll repay over time. For example, you might get $10,000 now and repay $12,000. That $2,000 difference is called the “discount” — it’s the cost of the advance. Instead of charging interest like a loan, MCA providers use a factor rate (like 1.2) to calculate what you’ll owe in total. The higher the factor, the more you pay back.

A Merchant Cash Advance is not a loan. It’s an advance on your future business sales — meaning a funding company purchases a portion of your projected revenue at a discount and collects payments over time. Legally, MCAs are structured as a purchase of receivables — not a loan — so they aren’t regulated by traditional lending laws. However, states like California and New York require MCA providers to disclose an APR-equivalent to improve transparency. That’s why it might look or feel like a loan in some places, even though it’s not.

Mom & Pop Business Funding is a direct MCA funder known for fast approvals, flexible terms, and a focus on supporting small to midsize businesses across the U.S. Mea Creations L.L.C. proudly partners with Mom & Pop to help business owners access working capital when they need it most. That’s why you’ll see the Mom & Pop logo on your application and other official materials.

It depends. MCAs are great for urgent needs, short-term gaps, or when bank loans aren’t an option. If you qualify for a traditional loan and don’t need funds quickly, a lower-cost loan may be a better fit.

Yes, you can — but keep in mind MCA repayment is based on a fixed factor rate, not interest. Paying early won’t reduce the total amount owed.

Repayments are either a fixed amount via ACH or a percentage of your daily credit card sales. It adjusts with your business volume — if you make less, you pay less.

We work with a wide range of industries, but there are some exceptions. We typically do not fund high-risk sectors such as adult entertainment, firearms, or certain cannabis-related businesses. Publicly traded companies are also not eligible. However, we do fund franchisees. If you're unsure whether your business qualifies, feel free to reach out to us directly for clarification.

Nope! MCAs are unsecured — no property, equipment, or assets are required to qualify.

✅ 6+ months in business ✅ At least 4–6 business bank deposits per month ✅ Gross monthly revenue of $5,000–$10,000+ ✅ U.S.-based business ✅ Active business checking account ✅ Credit card processing account (preferred but not required) ✅ Government-issued ID (for the business owner) ✅ No open bankruptcies (past bankruptcies are okay) ✅ Soft credit check (won’t affect your score — and may not be required)

📝 Complete the 1-page application form 📄 Provide one of the following: 3 months of business bank statements and 3 months of credit card processing statement, or 6 months of business bank statements (if no card processing) 🧾 Voided business check 🏢 Copy of lease agreement (if applicable) 🪪 Copy of driver's license (front and back)

If your MCA repayment is structured as a percentage of daily sales (known as a holdback), your payments will naturally decrease during slower periods, providing some relief.However, if you have fixed daily or weekly payments, it's crucial to communicate with your MCA provider promptly to discuss possible adjustments or relief options.

MCAs typically have a fixed repayment amount based on the factor rate, meaning that repaying early doesn't reduce the total amount owed. It's important to review your specific agreement to understand any terms related to early repayment.

Most MCA providers perform a soft credit pull during the application process, which doesn't impact your credit score. However, failing to meet repayment obligations could lead to collections or legal action, which may negatively affect your credit.