Add-on: Meaning in a Merchant Cash Advance
An add-on is extra funding a funder puts on top of an existing merchant cash advance, increasing the purchased amount and the payment without starting a completely new position. Funders offer them to merchants who are paying well.
What does add-on mean?
Instead of waiting for a full renewal, some funders let you add more cash to your current advance. You sign an amendment or a short new agreement, the funder wires the extra amount and your payment goes up to cover the combined balance. Because it's the same funder, you stay in the same position.
Why does add-on matter to your business?
An add-on is often quicker than a new advance and avoids the pricing penalty of stacking with another funder. But it raises your payment right away and adds a new cost. Treat it like any new funding: check the extra amount, the new payment, the new total and any fees.
When does an add-on make sense?
An add-on fits a clear, short term need that comes up mid-advance, like a large order or a seasonal inventory buy. It fits less well as a way to cover ongoing shortfalls.
How do you ask for an add-on?
If you're paying well and need a little more, ask your funder directly whether it offers add-ons. Some do it routinely and move quickly. Others prefer a full renewal. Either way, asking your current funder first keeps you out of a stacked position with a second funder.
What should you read in the add-on amendment?
Check whether the add-on changes the factor rate on the whole balance or only on the new money.
Where will you see it?
In offers from your current funder and in an amendment to your existing contract.
Which terms are related to add-on?
The full list is in the glossary. Owners ask about this in Is an MCA renewal cheaper than the first advance?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. 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.