How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 merchant cash advance companies
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
Expansion Capital Group Merchant Cash Advance with Fundera by NerdWallet | Best for Borrowers with bad credit | $300,000 | 500 | with Fundera by NerdWallet |
Fora Financial Revenue Advance with Fundera by NerdWallet | Best for Startups | $1,500,000 | 570 | with Fundera by NerdWallet |
Libertas Funding Revenue-Based Advance with Fundera by NerdWallet | Best for Established businesses | $5,000,000 | 650 | with Fundera by NerdWallet |
Giggle Finance Merchant Cash Advance with Fundera by NerdWallet | Best for Self-employed individuals | $5,000 | 300 | with Fundera by NerdWallet |
Credibly Merchant Cash Advance | Best for Low starting factor rates | $600,000 | 500 | |
Reliant Funding Merchant Cash Advance | Best for Limited revenue | $400,000 | 525 | |
Rapid Finance - Merchant cash advance with Fundera by NerdWallet | Best for Low fees | $500,000 | 600 | with Fundera by NerdWallet |
Here are 7 merchant cash advance companies
Best for Borrowers with bad credit
Best for Startups
Best for Established businesses
Best for Self-employed individuals
Best for Low starting factor rates
Credibly
Max Amount
$600,000
Min. Credit Score
500
Best for Limited revenue
Reliant Funding
Max Amount
$400,000
Min. Credit Score
525
Best for Low fees
I'M INTERESTED IN:
Our pick for
Borrowers with bad credit
Expansion Capital Group provides funding to borrowers with a minimum credit score of 500.
Expansion Capital Group Merchant Cash Advance
with Fundera by NerdWallet
Max loan amount
$300,000
Min. credit score
500
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
- Offers prepayment discounts.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
- Charges an origination fee and a monthly servicing fee.
Expansion Capital Group Merchant Cash Advance
Max loan amount
$300,000
Min. credit score
500
Expansion Capital Group provides funding to borrowers with a minimum credit score of 500.
Expansion Capital Group can provide fast and easy financing for newer businesses and borrowers with bad credit.
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
- Offers prepayment discounts.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
- Charges an origination fee and a monthly servicing fee.
Qualifications:
- Minimum credit score: 500.
- Minimum time in business: Six months.
- Minimum annual revenue: $100,000.
Our pick for
Startups
To qualify for a revenue advance from Fora Financial, you need a minimum of just six months in business.
Fora Financial Revenue Advance
Max loan amount
$1,500,000
Min. credit score
570
Pros
- Large advance amounts available.
- No physical collateral required.
- Prepayment discounts available.
Cons
- Charges one-time processing fee.
- UCC lien may be required.
Fora Financial Revenue Advance
Max loan amount
$1,500,000
Min. credit score
570
To qualify for a revenue advance from Fora Financial, you need a minimum of just six months in business.
Fora Financial has flexible qualification requirements and can offer large advance amounts.
Pros
- Large advance amounts available.
- No physical collateral required.
- Prepayment discounts available.
Cons
- Charges one-time processing fee.
- UCC lien may be required.
Qualifications:
- Minimum credit score: 570.
- Minimum time in business: Six months.
- Minimum annual revenue: $240,000 ($20,000 per month in revenue).
- Factor rates range from 1.13 to 1.28; vary based on product details and your qualifications.
Our pick for
Established businesses
You need to have good credit, strong annual revenue and at least three years in business to qualify for Libertas Funding.
Libertas Funding Revenue-Based Advance
with Fundera by NerdWallet
Max loan amount
$5,000,000
Min. credit score
650
Pros
- Large advance amounts available.
- Flexible payment options.
- Prepayment discounts available.
Cons
- High credit score and annual revenue requirements compared to competitors.
- Factor rate and fee information not available on website.
- Charges an origination fee.
Libertas Funding Revenue-Based Advance
Max loan amount
$5,000,000
Min. credit score
650
You need to have good credit, strong annual revenue and at least three years in business to qualify for Libertas Funding.
Libertas can offer same-day funding for borrowers with good credit and strong business revenue.
Pros
- Large advance amounts available.
- Flexible payment options.
- Prepayment discounts available.
Cons
- High credit score and annual revenue requirements compared to competitors.
- Factor rate and fee information not available on website.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 650.
- Minimum annual revenue: $1.8 million ($150,000 per month in revenue).
- Minimum time in business: 36 months.
Our pick for
Self-employed individuals
Giggle Finance offers fast funding designed specifically for freelancers, contractors, online sellers and other self-employed individuals.
Giggle Finance Merchant Cash Advance
with Fundera by NerdWallet
Max loan amount
$5,000
Min. credit score
300
Pros
- No minimum credit score requirement.
- Same-day funding available.
- Specifically designed for freelancers and self-employed individuals.
Cons
- Funding maxes out at $5,000.
- Factor rate and fee information not available on website.
- Charges an origination fee.
Giggle Finance Merchant Cash Advance
Max loan amount
$5,000
Min. credit score
300
Giggle Finance offers fast funding designed specifically for freelancers, contractors, online sellers and other self-employed individuals.
Giggle Finance provides capital to freelancers, contractors and self-employed individuals.
Pros
- No minimum credit score requirement.
- Same-day funding available.
- Specifically designed for freelancers and self-employed individuals.
Cons
- Funding maxes out at $5,000.
- Factor rate and fee information not available on website.
- Charges an origination fee.
Qualifications:
- Minimum credit score: All credit scores may be accepted (ranging from 300 to 850).
- Minimum time in business: Three months.
- Minimum annual revenue: $36,000.
Our pick for
Low starting factor rates
Credibly offers factor rates on its merchant cash advances that start as low as 1.11.
Credibly Merchant Cash Advance
Max loan amount
$600,000
Min. credit score
500
Pros
- Prepayment discounts available.
- No personal guarantee required.
- Can be used to build business credit.
Cons
- Daily repayments required.
- Charges one-time underwriting fee and monthly admin fee.
Credibly Merchant Cash Advance
Max loan amount
$600,000
Min. credit score
500
Credibly offers factor rates on its merchant cash advances that start as low as 1.11.
Credibly offers fast, flexible funding with low starting factor rates.
Pros
- Prepayment discounts available.
- No personal guarantee required.
- Can be used to build business credit.
Cons
- Daily repayments required.
- Charges one-time underwriting fee and monthly admin fee.
Qualifications:
- Minimum credit score: 500.
- Minimum time in business: Six months.
- Minimum annual revenue: $180,000 ($15,000 average monthly bank deposits).
- Factor rates start at 1.11.
Our pick for
Limited revenue
You may be able to qualify for an MCA from Reliant Funding with a minimum of $5,000 in monthly revenue.
Reliant Funding Merchant Cash Advance
Max loan amount
$400,000
Min. credit score
525
Pros
- Funding available in as little as 24 hours.
- Low annual revenue requirement.
- Daily or weekly repayment available.
Cons
- Factor rate and fee information not available on website.
Reliant Funding Merchant Cash Advance
Max loan amount
$400,000
Min. credit score
525
You may be able to qualify for an MCA from Reliant Funding with a minimum of $5,000 in monthly revenue.
You may be able to qualify for next-day funding from Reliant, even with bad credit or limited revenue.
Pros
- Funding available in as little as 24 hours.
- Low annual revenue requirement.
- Daily or weekly repayment available.
Cons
- Factor rate and fee information not available on website.
Qualifications:
- Minimum credit score: 525.
- Minimum time in business: Six months.
- Minimum annual revenue: $60,000.
Our pick for
Low fees
Rapid Finance does not charge an origination fee, maintenance fees or prepayment penalties.
Rapid Finance - Merchant cash advance
with Fundera by NerdWallet
Max loan amount
$500,000
Min. credit score
600
Pros
- No prepayment penalties or other fees.
- Can be approved with a credit score as low as 600.
Cons
- Daily or weekly payments.
- Lengthy time in business requirement.
Rapid Finance - Merchant cash advance
Max loan amount
$500,000
Min. credit score
600
Rapid Finance does not charge an origination fee, maintenance fees or prepayment penalties.
Rapid Finance is an online lender that offers merchant cash advances up to $500,000 for established businesses with credit scores starting at 600.
Pros
- No prepayment penalties or other fees.
- Can be approved with a credit score as low as 600.
Cons
- Daily or weekly payments.
- Lengthy time in business requirement.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: Three years.
- Minimum revenue requirement: $10,000 per month.
How to choose a merchant cash advance company
You’ll want to research and vet several merchant cash advance companies before deciding which one is right for your business.
Some MCA companies have been criticized for confusing contracts and misleading sales tactics — leading businesses to fall victim to cycles of expensive debt that are difficult to break.
Although some states have taken legal action to require transparency from MCA companies in recent years, predatory lenders still try to take advantage of business owners, promising things like “guaranteed approval” or “business loans with no credit check.”
Not all merchant cash advance companies are bad actors, but it’s important to watch for red flags — and look elsewhere if an offer doesn’t seem right.
As you compare MCA providers, consider these factors:
Merchant cash advance companies have different maximum funding amounts. You should confirm that the provider’s requirements are in line with what you’re looking for.
MCAs are one of the most expensive forms of business financing with annual percentage rates (APRs) that can potentially reach 350%. MCA companies charge fees as factor rates instead of APRs or simple interest rates which can make it more difficult to understand borrowing costs.
You can translate a factor rate into an APR by using an MCA calculator. Also, ask the company if it charges additional fees — like underwriting fees or setup fees, for example — and include those in your APR calculations as well.
Automatic deductions from your debit and credit card sales or withdrawals from your business bank account are your typical repayment options. If you have a preference, confirm that the option is offered by the provider.
Providers often require daily or weekly repayments, but in some cases you may find a provider that offers biweekly or monthly repayments.
Compared with more traditional small-business lenders, merchant cash advance companies typically have flexible eligibility requirements. These companies consider your personal credit score, time in business and annual revenue — but they’ll often be willing to work with startups and business owners with bad credit .
Many MCA companies prioritize your debit and credit card sales or monthly bank activity when underwriting your application because you’ll be using your sales to repay your advance. Typically, the stronger your credentials, the lower the factor rate you’ll receive on funding.
Most MCA companies offer simple applications with minimal documentation. You can usually apply and receive funding within a few business days. Some providers offer dedicated account managers to walk you through the process, which could be helpful if you prefer a more personalized experience.
You’ll want to look for a merchant cash advance company that is upfront about its products and the way they work. Ideally, the company offers multiple ways for you to contact customer service — and you receive straightforward answers to your questions.
If you receive an MCA agreement from a provider, it should clearly lay out terms and conditions, fees and repayment information. Additionally, reading reviews can help you verify the reputation and reliability of a merchant cash advance company.
Many MCA companies request or require you to sign a confession of judgment at closing, which is an agreement that allows an MCA company to file a judgment against you in court without letting you know. If you can, find out if your MCA company requires this document before you move forward with an application. If it is a requirement, that alone may be a reason to look elsewhere.
What is a merchant cash advance?
A merchant cash advance is an alternative form of business financing based on a business’s credit and debit card sales. A merchant cash advance company offers a lump sum of money to businesses in exchange for a portion of their future sales revenue. Advances can range from a few thousand dollars to $5 million or more.
Merchant cash advances are also referred to as business cash advances and business payday loans.
How does a merchant cash advance work?
Automatic repaymentsBorrowers are typically set up for automatic repayments through a percentage of their debit and credit card sales or withdrawals from their business bank account. These payments are typically made daily or weekly.
Factor ratesMCA companies charge a factor rate instead of an interest rate. For example, an advance of $50,000 with a factor rate of 1.2 would require a total repayment of $60,000 ($50,000 x 1.2 = $60,000).
Additional feesIn addition to a factor rate, you may also pay charges such as underwriting, administration, setup or service fees. And some MCA lenders offer prepayment discounts if you repay the advance early.
Term lengthsTerm lengths vary by lender, but generally run from three to 24 months. In some cases, the MCA company may advance you additional funds if you’ve paid off a portion of the original advance
🤓 Nerdy Tip
Reputable MCA companies are transparent about how their products work. This includes being upfront about the factor rate you will receive, additional fees they charge and repayment requirements for the advance. You shouldn’t feel pressured to sign an MCA agreement, especially if you don’t have a clear understanding of your obligations under the contract.How to improve your chances of getting traditional financing
Review your credit history
Reviewing your personal and business credit reports for accuracy and then removing errors or outdated information can often help raise your credit scores.
There are also steps you can take to build your business credit score that may make it easier to get financing other than an MCA. This may include applying for an employer identification number, setting up trade credit with your suppliers or applying for a business credit card.
» MORE: Business loans for bad credit
Offer collateral
A borrower who offers collateral — an asset such as equipment, a vehicle or real estate — may find it easier to get approved by a lender. Lenders look to minimize the chances that a loan won’t be repaid. They assess risk based on a borrower’s credit, time in business, business revenue and other factors. The lender’s risk can be lowered by offering an asset that can be seized if you default on the loan.
Add a cosigner
If you’re having difficulty getting approved for traditional financing, adding a cosigner may help you avoid MCA financing. When someone agrees to be a cosigner on a business loan, they agree to make payments on the loan if you don’t. Having two guarantors on a loan can reduce the risk to the lender and improve your chances of getting approved.
A cosigner with excellent credit, strong income and assets would typically work to your benefit when applying for a loan. But remember that if you default on the loan, the cosigner’s finances will be affected along with your own.
Alternatives to merchant cash advance companies
It’s worth exploring other options besides merchant cash advances, which can include:
If you need fast financing, or are struggling to qualify for a loan because of credit challenges, online loans may be a better option than MCA financing. These short-term loans will have a set repayment period, and although they may require frequent payments, they will likely have a lower overall cost than MCAs.
» MORE: Best short-term business loans
Business credit cards can be easier to get than a business loan because time in business is typically more flexible for qualification. They can give you access to cash while you build your time in business and your business credit history.
While business credit cards can have higher APRs than business loans, they would typically be more competitive than MCAs. Also, they often offer ongoing rewards and other benefits to the cardholder.
Business-to-business companies that are struggling to qualify for other loan options might consider invoice factoring.
Invoice factoring allows you to sell your unpaid invoices to a factoring company at a discount. You receive an advance of cash and the factoring company takes responsibility for collecting repayment from your customers. Once your customers have paid, the factoring company sends you the difference, minus the agreed-upon fees.
Because factoring companies prioritize the value of your invoices and creditworthiness of your customers when evaluating your application, invoice factoring can be easier to qualify for than more traditional loan options, even if you’re a new business or have bad credit.
Last updated on September 17, 2024
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
See Your Loan Options
Frequently Asked Questions
Merchant cash advances are one of the most expensive forms of business financing. Factor rates typically range from 1.1 to 1.5, but can translate into APRs that range from 40% to 350%. Your total cost, however, will depend on the amount advanced, the factor rate and other fees charged by the MCA company.
Simply having a merchant cash advance on your credit report won’t negatively impact your credit; however, they are an expensive form of financing that can trap you in a harmful cycle of debt, eat away your cash reserves and even result in a judgment. These consequences can all impact your credit.