Comparing Merchant Cash Advances to Traditional Business Lending

MCA or Merchant Cash Advance are gradually becoming more mainstream as several small and medium businesses that are not being able to secure a bank loan are turning to alternative funding sources. This is because; a merchant cash advance can be availed by a business quickly and that too with minimal paperworks. Hence, as banks continue to be very tight with their loans; merchant cash advance is becoming extremely appealing to small business owners over time.

How MCA works?

To illustrate in layman’s terms, Merchant Cash Advance, or an MCA provides purchases a pre-defined amount of a business’s future credit card receivables in one lump sum in return for the receivables, which is paid back to the lending organization over a certain period of time, which is usually calculated as a daily percentage of the customer’s debit/credit card totals. This is the key benefit that distinguishes MCA from conventional loans.

In other words, Merchant Cash Advance is not loaning a business any money, rather it is a simple process of buying a portion of the customer’s future business revenue.

Advantages of MCA Borrowings Over Bank Loans

The primary advantage of MCA over bank loans is that Merchant Cash Advance, in general, does not require any collateral, and liens (although this is always subjected to certain conditions). Apart from this, the other ranges of benefits that small businesses receive from choosing this kind of funding are:

• No rigid monthly payments

• No upfront fees

• No UCC-1 (Uniform Commercial Code-1) at the time of funding

• No collaterals (subjected to certain conditions)

• No limits on how you spend the fund

• Minimal approval time for disbursement of the fund

Therefore, the greatest advantage of MCA is that the amount, which the business pays, is based on the sum total of the credit card transactions that the borrower receives every day. As there are no set fees that must be paid every month, so small businesses taking merchant cash advance still have an access to a greater portion of their own revenues. This implies, if your sale drops for a specific month, your MCA payment will also become low to reflect that change.

Why use a Merchant Cash Advance CRM?

While all CRM may work for any business, Merchant Cash Advance CRM is specially designed for MCA businesses, as it not only helps in easy collaboration with the funders but it also helps MCA business in the following ways, which include:

• Find a central repository for merchant contact information, related documents and underwriting information

• Escalate the power of communication by integrated with DocuSign, Email, and Fax application templates for merchants and funders

• Track deals from underwriting to funded stages

• Syndicate and track approval numbers, management fees and commissions

• Increase agent’s productivity by using quick lead capture form, easy edits, 360-degree merchant profile view and one-click deal conversion

• Multiple fund submission and tracking

Takeaway

Therefore as a small business owner, if you find that you have the opportunity of expanding your business, but you do not have the time for traditional funding to come through, it is the perfect time to consider Merchant Cash Advance to get the finance you need, especially just when you need them.

https://www.convergehub.com/blog/use-merchant-cash-advance-crm-mca-business

Merchant Cash Advance Qualification Checklist

✅ Business Requirements

• ☐ Operating for at least 6 months (some lenders may require 1+ year)

• ☐ Based in the U.S. (or lender's approved region)

• ☐ Not in a restricted industry (e.g., gambling, adult entertainment, firearms)

✅ Revenue & Transactions

• ☐ Minimum $10,000/month in revenue (some lenders may require more)

• ☐ Consistent credit card or debit card sales (if applicable)

• ☐ No excessive NSFs (non-sufficient funds) or overdrafts

✅ Banking & Financials

• ☐ Business has a dedicated business bank account

• ☐ No active bankruptcies

• ☐ Limited open tax liens or judgments (or must have a repayment plan)

✅ Credit & Risk Factors

• ☐ 500+ personal credit score (some lenders accept lower)

• ☐ No excessive loan stacking (too many outstanding advances)

• ☐ Business is not on any fraud or watch lists

✅ Documentation Needed

• ☐ Last 6 months of business bank statements or

• ☐ Last 3-6 months of merchant processing statements (if applicable)

• ☐ Business license (if required for the industry)

• ☐ Driver’s license or government-issued ID of the owner(s)

• ☐ Voided business check (for funding deposit)