Merchant Cash Advance FAQ
MCA FAQ: merchant cash advance questions, answered.
A merchant cash advance gives your business cash now for a share of its future sales. Below are straight answers to the questions owners ask most, on what it costs, who qualifies, what to send, how repayment works and what the law says, sorted by topic. Applying is free, and you never pay us a fee. The funder pays us a commission only when your deal funds, and the amount is in your offer paperwork before you sign.
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MCA basics
What a merchant cash advance is, how it differs from other funding, and when it makes sense.
What is a merchant cash advance, in plain words?
You get a lump sum today and pay it back from a fixed share of the sales your business makes next. Full answer in MCA basics
Why isn't an MCA called a loan?
The funder owns a slice of your future sales rather than a debt, which is why the contract reads like a purchase. Full answer in MCA basics
Is a merchant cash advance a good idea?
It pays off when the money earns back more than its cost before the last payment, and it hurts when it only covers ongoing losses. Full answer in MCA basics
Is a business cash advance the same as a merchant cash advance?
Most companies use the two names for the same product, so read the contract to see which structure you're signing. Full answer in MCA basics
Is revenue-based financing the same as an MCA?
Both tie repayment to revenue, but revenue-based financing often runs longer and is sized on recurring sales. Full answer in MCA basics
Which businesses use merchant cash advances?
Owners with steady deposits, from restaurants and shops to trades and clinics, make up most of the files funders see. Full answer in MCA basics
What can MCA money be used for?
Inventory, payroll gaps, repairs, marketing and a big order are the usual reasons, and funders rarely limit the choice. Full answer in MCA basics
How is an MCA different from a line of credit?
A line stays open for repeat draws, while an advance hands you one lump sum with a fixed total to deliver. Full answer in MCA basics
How is an MCA different from invoice factoring?
Factoring turns specific invoices into cash, and an advance buys a share of all your upcoming sales instead. Full answer in MCA basics
How is an MCA different from a bank or SBA loan?
Banks charge less and ask for more, so the trade is price against speed and paperwork. Full answer in MCA basics
Would a business credit card be better than an MCA?
A card often wins for a small, quick need you can clear within a statement or two. Full answer in MCA basics
What are the main risks of an MCA?
The big three are cost, the daily squeeze on cash and the temptation to stack a second advance. Full answer in MCA basics
How do I handle an MCA on my taxes and books?
Your CPA sets the treatment from your contract and your books, so bring them the paperwork before the first payment. Full answer in MCA basics
Is a merchant cash advance halal?
Scholars differ on it, so the ruling for you comes from the scholar you follow, not from a funder or a broker. Full answer in MCA basics
Cost and pricing
Factor rates, total payback, fees and how to put a real number on what an advance costs.
How much does a merchant cash advance cost?
Subtract the cash you receive from the total you deliver, and that dollar gap is the real price to compare. Full answer in Cost and pricing
What is a factor rate?
It's the single multiplier that turns your advance into the total the funder collects. Full answer in Cost and pricing
What is a good factor rate for an MCA?
A fair price depends on your file, your term and your fees, so compare offers on dollars rather than a target number. Full answer in Cost and pricing
Is a factor rate the same as an APR?
A factor rate is a one time multiplier, while an APR spreads the cost across a year, so the two read very differently. Full answer in Cost and pricing
How do I estimate the APR on an MCA?
Work from the dollar cost, the cash you kept and the expected term, or let our calculator run it for you. Full answer in Cost and pricing
What fees can come with an MCA?
Watch for underwriting, origination and bank fees taken before the wire, plus fees some contracts add later. Full answer in Cost and pricing
What is net funding?
This is the money that actually reaches your account once fees and any old balance come out. Full answer in Cost and pricing
Do I save money by paying an MCA off early?
Paying early only saves money when your contract spells out an early payoff discount. Full answer in Cost and pricing
Why do MCAs cost more than a bank loan?
Funders take on more risk, move faster and ask for less, and the price reflects all three. Full answer in Cost and pricing
Can I negotiate the price of an MCA?
Strong files and competing offers give you room to ask for a lower rate or smaller fees. Full answer in Cost and pricing
Does using a broker make my advance cost more?
You pay us nothing, and the funder pays our commission on funding, disclosed in your paperwork. Full answer in Cost and pricing
Qualifying
What funders look for, and what makes a file harder to place.
What do funders look for to approve an MCA?
Steady deposits, some time in business and payments you already carry are what funders weigh first. Full answer in Qualifying
How long do I need to be in business?
Each funder sets its own minimum, and a longer history opens more doors. Full answer in Qualifying
How much monthly revenue do I need?
Minimums differ by funder, and your offer grows with the deposits your statements show. Full answer in Qualifying
How much can I get from an MCA?
Funders size the advance from your average deposits after the payments you already make. Full answer in Qualifying
Can a startup get an MCA?
With no sales history, there's little for a funder to buy, so brand new businesses find it hard. Full answer in Qualifying
Can I get an MCA if I don't take many card sales?
Cash, checks and transfers into your business account count, so card volume isn't a requirement. Full answer in Qualifying
I was declined somewhere else. Can I still apply?
A decline from one funder says little about the next, since each reads files its own way. Full answer in Qualifying
Do overdrafts or NSFs hurt my chances?
A few returned items with an explanation are workable, while a steady pattern shrinks your options. Full answer in Qualifying
Can a sole proprietor or home-based business get an MCA?
A business bank account with steady sales matters more than the legal form of the business. Full answer in Qualifying
Can I qualify with a tax lien or a judgment?
A payment plan that's current, or a plan to clear the lien at funding, keeps more funders open to the file. Full answer in Qualifying
I own more than one business. Can each one get an advance?
Each business stands on its own deposits, though funders also look at the owner's total load. Full answer in Qualifying
Credit
How credit fits into an MCA decision and what to ask about it.
Does applying affect my credit?
Starting with us leaves your score alone, and funders tell you before any check of their own. Full answer in Credit
What credit score do I need for an MCA?
Funders weigh deposits heavily, so there's no single score that decides every file. Full answer in Credit
Can I get an MCA with bad credit?
Steady deposits carry a lot of weight, so a rough credit history doesn't end the conversation. Full answer in Credit
Do MCAs show up on my credit report or build credit?
Many funders never report payments, so an advance rarely raises or lowers your scores on its own. Full answer in Credit
Is an MCA secured or unsecured?
There's usually no single asset pledged, though a UCC filing records the funder's claim on receivables. Full answer in Credit
Will I have to sign a personal guarantee?
Most contracts ask the owner to sign a promise about how the business behaves during the advance. Full answer in Credit
Do I have to give my Social Security number?
We don't ask for it, and a funder that runs a credit check asks you directly. Full answer in Credit
What is a UCC filing on an MCA?
It's a public record showing a funder's claim on your receivables, and it should be released when you finish. Full answer in Credit
Can I get an MCA after a bankruptcy?
Some funders consider a file once the case is discharged and the account shows a clean stretch. Full answer in Credit
Documents and bank statements
What to send, why statements matter, and how funders read them.
What documents do I need for an MCA?
Your recent business bank statements do most of the work, with ID and a voided check at closing. Full answer in Documents and bank statements
How many months of bank statements do funders want?
Plan on the last few full months, plus the current month to date. Full answer in Documents and bank statements
What do funders look for in bank statements?
Underwriters read deposits, balances, negative days, returned items and payments you already make. Full answer in Documents and bank statements
What are actual deposits?
Only money from sales counts, so transfers, loans and refunds get set aside. Full answer in Documents and bank statements
What is a current-month statement?
It covers the days since your last full statement, so a funder sees how this month is going. Full answer in Documents and bank statements
What format should my bank statements be in?
The bank's own PDF statements read cleanly, while photos and screenshots slow things down. Full answer in Documents and bank statements
Can I get an MCA without bank statements?
Statements are how funders see your business, so a file without them almost never moves. Full answer in Documents and bank statements
Do I have to share my bank login?
You never have to hand over a password, and some funders verify through a secure read only link you control. Full answer in Documents and bank statements
What if my sales go into more than one bank account?
Send every account that takes in business revenue so the funder sees the whole picture. Full answer in Documents and bank statements
Should I explain a bad month in my statements?
A short, honest note on a slow month helps the funder read the rest of the file fairly. Full answer in Documents and bank statements
Applying with Afterfirst
How applying with us works, from the first call to the offers.
Is Afterfirst a lender or a funder?
We're a nationwide broker headquartered in Los Angeles, and we shop your file with funders. Full answer in Applying with Afterfirst
How do I apply?
Start on our site or call us, send your recent statements and we take it from there. Full answer in Applying with Afterfirst
Does it cost anything to apply?
It's free to start, and nothing you do with us comes with a fee from you. Full answer in Applying with Afterfirst
What happens after I apply?
A person calls you back, usually the same business day, before your file goes to any funder. Full answer in Applying with Afterfirst
How long does the process take?
The pace depends mostly on how fast complete statements and documents arrive. Full answer in Applying with Afterfirst
Can I get funded the same day I apply?
A complete file approved early in the day sometimes funds that day, but nobody should promise it up front. Full answer in Applying with Afterfirst
Do I have to accept an offer?
Every offer is yours to take or leave, and you owe nothing for turning one down. Full answer in Applying with Afterfirst
Why use a broker instead of going to one funder?
Shopping several funders at once shows you the range, where one funder shows you only its own terms. Full answer in Applying with Afterfirst
Do you work with businesses in my state?
We work with businesses nationwide, and a few state rules change the paperwork you see. Full answer in Applying with Afterfirst
Offers and comparing
How to read an offer, what to compare and what to watch for.
How should I compare MCA offers?
Line up net funding, total payback, payment, term and fees in one table before you choose. Full answer in Offers and comparing
What should an MCA offer show?
Every real offer lists the amount, the payback, each fee, the net funding and the payment schedule. Full answer in Offers and comparing
Should I take the biggest offer?
The largest number carries the largest payment, so take the amount your purpose needs. Full answer in Offers and comparing
Is a longer payback always better?
Smaller payments feel easier, but a longer term with a higher factor costs more in total. Full answer in Offers and comparing
What are the red flags in an MCA offer?
Upfront fees, blank terms, pressure to sign and a missing total payback are reasons to stop. Full answer in Offers and comparing
Which contract terms should I read closely?
The payment, reconciliation, default and guarantee sections shape your experience most. Full answer in Offers and comparing
Do MCA offers expire?
Offers rest on a snapshot of your account, so they run out and get repriced with fresh statements. Full answer in Offers and comparing
Should a lawyer read my MCA contract?
A legal read is worth it on a large amount or any clause you don't understand. Full answer in Offers and comparing
Can an offer change after I accept it?
New facts in the final review, like an undisclosed advance, can change the terms before funding. Full answer in Offers and comparing
Can I cancel an MCA after I sign?
Ask the funder right away if the money hasn't moved, since options shrink once it has. Full answer in Offers and comparing
Repayment and holdback
How payments are taken, how much, how long, and what happens when sales slow down.
How do I repay an MCA?
Payments come out of your business account automatically, most often every business day or once a week. Full answer in Repayment and holdback
What is a holdback?
It's the share of sales the contract sets for the funder, and it drives the size of each payment. Full answer in Repayment and holdback
What holdback percentage should I expect?
The share depends on your file and the funder, so compare what it means in dollars per day. Full answer in Repayment and holdback
Can I pay weekly instead of daily?
Many funders offer a weekly schedule, which some owners find easier to plan around. Full answer in Repayment and holdback
Do MCA payments come out on weekends and holidays?
Debits follow the banking calendar, so weekends and bank holidays usually pass without one. Full answer in Repayment and holdback
How long does an MCA last?
Your payment size and, on a split, your sales decide how many months it runs. Full answer in Repayment and holdback
What is reconciliation?
Many contracts let you ask for payments that match your actual sales when business slows. Full answer in Repayment and holdback
What happens if my sales slow down?
Call the funder early and ask about reconciliation before a payment bounces. Full answer in Repayment and holdback
What happens if a payment bounces?
Expect a returned payment fee and a retry, and call the funder the same day. Full answer in Repayment and holdback
What counts as a default on an MCA?
Blocking debits, moving accounts without notice and diverting sales are the usual triggers. Full answer in Repayment and holdback
Can I change bank accounts during an MCA?
Tell the funder first and sign a new authorization so no payment fails in the switch. Full answer in Repayment and holdback
How do I get a payoff letter, and what should I get when I'm done?
Ask in writing for the exact payoff figure, then a zero balance letter and a UCC release when you finish. Full answer in Repayment and holdback
Positions and stacking
What first, second and third position mean, and how funders see a file with more than one advance.
What does position mean in an MCA?
Position is simply the order your open advances were taken in, first, second and so on. Full answer in Positions and stacking
What is MCA stacking?
Stacking is layering a new advance on top of one that's still being paid. Full answer in Positions and stacking
How many MCAs can I have at once?
No law sets a cap, but each funder decides how many open positions it will sit behind. Full answer in Positions and stacking
Can I get a second position MCA?
Funders do fund behind an existing advance, with smaller amounts and higher prices. Full answer in Positions and stacking
Can I get a third position MCA?
A shorter list of funders goes that deep, and the terms reflect the extra risk. Full answer in Positions and stacking
Do I have to tell funders about my other advances?
Tell every funder about every open advance, since they find them in your statements anyway. Full answer in Positions and stacking
What is an anti-stacking clause?
It's the clause that stops you from adding another advance without your funder's consent. Full answer in Positions and stacking
Will my funder find out if I take another advance?
Your statements and UCC records reveal new advances, so expect your funder to learn about it. Full answer in Positions and stacking
What can I do instead of stacking another advance?
Consolidation, a renewal, a reconciliation or a line of credit are the usual alternatives. Full answer in Positions and stacking
Consolidation, renewals and MCA debt
Options when payments are too heavy, and how renewals and add-ons work.
What is MCA consolidation?
One new advance pays off several, leaving you with a single payment to manage. Full answer in Consolidation, renewals and MCA debt
What is a reverse consolidation?
A new funder covers your existing debits week by week, then collects one smaller payment from you over time. Full answer in Consolidation, renewals and MCA debt
Should I choose consolidation or reverse consolidation?
The standard route pays everything off at once, while the reverse route keeps the old advances running out. Full answer in Consolidation, renewals and MCA debt
What is an MCA renewal?
It's a fresh advance from the funder you already pay, once part of the balance is behind you. Full answer in Consolidation, renewals and MCA debt
When should I renew an MCA, and is it a good deal?
Renew when enough of the balance is paid that real new cash reaches you. Full answer in Consolidation, renewals and MCA debt
How do I get out of MCA debt?
List every advance, stop adding new ones and talk to your funders before payments fail. Full answer in Consolidation, renewals and MCA debt
Should I use a debt settlement company for MCAs?
Read the fee terms and what they actually do before signing with any settlement company. Full answer in Consolidation, renewals and MCA debt
Can I ask a funder to restructure my payments?
Funders do rework payments for owners who ask early and show their numbers. Full answer in Consolidation, renewals and MCA debt
What is an MCA buyout?
A new funder pays off an existing advance as part of the new deal, so you carry one payment. Full answer in Consolidation, renewals and MCA debt
Legal questions and default
State rules, default, lawsuits and what a funder can and can't do.
Are merchant cash advances legal?
A properly structured purchase of future receivables is a lawful business contract. Full answer in Legal questions and default
Are merchant cash advances regulated?
Rules are lighter than for consumer loans, and several states now require cost disclosures. Full answer in Legal questions and default
Which states require MCA cost disclosures?
California and New York are two states with standard disclosure forms for this kind of funding. Full answer in Legal questions and default
What is a confession of judgment?
It's a clause that lets a funder get a judgment quickly on default, and several states restrict it. Full answer in Legal questions and default
Can an MCA funder freeze my bank account?
A funder needs a court process before any account freeze, and it can't do it on its own. Full answer in Legal questions and default
Can an MCA company sue me?
A funder can bring a breach of contract case, so responding to papers on time matters a great deal. Full answer in Legal questions and default
Can I go to jail for not paying an MCA?
Unpaid business contracts are civil matters, while fraud is a different story entirely. Full answer in Legal questions and default
What happens if I stop paying my MCA?
Stopping or blocking payments is usually a default, which is why a call to the funder comes first. Full answer in Legal questions and default
What happens to an MCA if I file bankruptcy?
A filing generally pauses collection, and the rest depends on the court and your contract. Full answer in Legal questions and default
Are merchant cash advances predatory?
The product itself isn't predatory, but some sellers use predatory tactics worth spotting. Full answer in Legal questions and default
Industries and uses
How MCAs fit different kinds of businesses and seasons.
Can restaurants get merchant cash advances?
Card heavy daily sales make restaurants one of the most common fits. Full answer in Industries and uses
Can contractors get an MCA?
Contractors qualify when deposits stay steady, and weekly payments fit lumpy job income well. Full answer in Industries and uses
Can trucking companies get an MCA?
Carriers with steady deposits qualify, including many with factored invoices. Full answer in Industries and uses
Can medical and dental offices get an MCA?
Practices with steady deposits, including insurance payments, get funded regularly. Full answer in Industries and uses
Can retail stores use an MCA for inventory?
Shops use advances to stock up before busy seasons and pay the advance from those sales. Full answer in Industries and uses
Can salons and spas get an MCA?
Salons and spas with regular deposits are a familiar fit for funders. Full answer in Industries and uses
Can an online store or Amazon seller get an MCA?
Online sellers qualify on marketplace and processor payouts into their business account. Full answer in Industries and uses
Can an auto repair shop get an MCA?
Repair shops with steady deposits fund parts, equipment repairs and payroll this way. Full answer in Industries and uses
Does an MCA work for a seasonal business?
Size the payment to your slow months so the advance stays comfortable year round. Full answer in Industries and uses
Can tax preparers get funding before tax season?
Preparers fund staffing and marketing ahead of the season, then pay from season revenue. Full answer in Industries and uses
Can HVAC companies get funding before heating season?
HVAC companies fund parts and crews before the busy season arrives. Full answer in Industries and uses
Can I use an MCA to make payroll?
It fits a short gap with money clearly coming, and it's a poor fix for a lasting shortfall. Full answer in Industries and uses
For brokers and referral partners
How brokers, ISOs and referral partners work with us.
Can brokers send files to Afterfirst?
Brokers send us files, and we shop them with funders in our network. Full answer in For brokers and referral partners
Will you contact my merchant directly?
The merchant relationship stays with you, and you remain broker of record. Full answer in For brokers and referral partners
What kind of files fit?
Second and third position, recent declines and thin histories are the files we handle well. Full answer in For brokers and referral partners
How are brokers paid on Afterfirst deals?
Pay terms live in a written partner agreement you read before sending any file. Full answer in For brokers and referral partners
How do I join as a broker?
Email us your company name, your state and the files you send, and we reply with next steps. Full answer in For brokers and referral partners
Can I refer a business without being a full-time broker?
Accountants, advisors and others refer owners to us without becoming full time brokers. Full answer in For brokers and referral partners
How do I become an MCA broker?
Learning to read statements and building funder relationships come first, along with any state registration. Full answer in For brokers and referral partners
Do MCA brokers need to be registered?
A few states require broker registration, so check the rules where you and your merchants operate. Full answer in For brokers and referral partners
What should a broker send with a file?
Complete statements, a month to date printout, the signed application and your notes on the file. Full answer in For brokers and referral partners
Can a broker charge the merchant a fee?
Some brokers charge merchants, and merchants deserve to know about any fee in writing up front. Full answer in For brokers and referral partners
For funders
How funders work with us and what arrives with each file.
How does a funder start working with Afterfirst?
Send us your buy box, and we'll match files to it. Full answer in For funders
What is a buy box?
It's the set of rules a funder uses to pick files, from revenue to positions to industries. Full answer in For funders
Does Afterfirst put its own money into deals?
We're a broker, so the capital on every deal comes from the funder. Full answer in For funders
What comes with each file?
Each file comes with a deposit summary, open positions, full statements and the application. Full answer in For funders
Can a funder change its buy box?
Update your buy box whenever your appetite changes, and we adjust what we send. Full answer in For funders
What does it cost a funder to work with you?
Terms sit in a written funder agreement, signed before any file is sent. Full answer in For funders
Will you send files with several open positions?
We send files with open positions only when your buy box says you take them. Full answer in For funders
Trust, privacy and rules
How your data is handled, how we're paid, and how to check who you're dealing with.
How is my data handled?
Statements arrive as PDFs over an encrypted connection and go only to funders chosen for your file. Full answer in Trust, privacy and rules
How does Afterfirst get paid?
The funder pays our commission on funding, it's disclosed in your paperwork and you never pay us. Full answer in Trust, privacy and rules
Do you favor funders that pay you more?
We present every offer we receive for your file, and the choice is yours. Full answer in Trust, privacy and rules
How do I check that an MCA broker is legit?
A real address, a clear answer on pay and no upfront fees are the basics to check. Full answer in Trust, privacy and rules
How do I spot an MCA scam?
Fees before funding and promises made without seeing statements are the signs to walk away. Full answer in Trust, privacy and rules
How do I raise a concern about a funder?
Email info@afterfirstmca.com or call 877-FUND-654 and we'll look into it. Full answer in Trust, privacy and rules
Can I ask you to delete my file?
Ask us and we'll remove your file, with any records the law requires us to keep noted. Full answer in Trust, privacy and rules
Still have a question?
Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.