Merchant Cash Advance Companies: How to Choose One
To compare merchant cash advance companies, line up each written offer on total payback in dollars, the debit you would carry in your slowest month and any fees taken before funding. Your own file decides which offer fits, not a ranked list.
How do I choose a merchant cash advance company? Compare real offers on your own file instead of a ranked list. Get the total payback in dollars, the payment amount and schedule, every fee, the prepayment terms and the position policy in writing. Then pick the offer whose payment you can carry in your slowest month.
Afterfirst MCA connects business owners with funders.
Who should read this: owners of businesses with steady deposits who want more than one MCA offer to compare. If you need personal money, this guide isn't for you.
How we're paid: Afterfirst is a broker. Funders pay us a membership and a commission when a deal funds. Owners never pay us.
What are the key facts on choosing an MCA company?
- A merchant cash advance buys part of a business's future sales; the business repays the advance plus a factor from those sales (FTC).
- California and New York require covered providers to give written cost and term disclosures with each MCA offer (California DFPI, NY DFS).
- Afterfirst is a broker that shops one application across its funder network, and the owner chooses the offer.
- Funders pay Afterfirst; owners never pay us.
- The FTC says factor rates often run about 1.2 to 1.5, which works out to paying back 20% to 50% more than the amount advanced (FTC).
- New York's disclosure rules cover commercial financing offers of $2.5 million or less (NY DFS).
From our network: Our funding partners have funded 130+ deals in 2026.
Which type of MCA company fits which business file?
| Your file | What to look for | Get this in writing | Source |
|---|---|---|---|
| Lower personal credit | Funders that weigh deposits over score; NerdWallet lists credit minimums from about 500 to 600 | Total payback and every fee | NerdWallet |
| Newer business | Funders with lower time-in-business minimums; listed minimums start around 3 to 12 months | Payment amount, schedule and term | NerdWallet |
| Already has an open advance | Funders that state a clear position policy | Position, and whether the new offer pays off the old one | Stacking guide |
| Sales that swing month to month | Payments tied to a share of sales, with a way to adjust | How reconciliation works and how to ask for it | California DFPI |
| Business in California or New York | Providers that hand over the state disclosure form with the offer | The signed state disclosure | California DFPI, NY DFS |
How do you check out an MCA company before you sign?
- Match the legal name. The company on the contract should match the company you spoke with. Look it up in the business search of your state's Secretary of State.
- Ask whether it's a broker or a funder. A broker shops your file; a funder sends the money. See broker or direct funder.
- Ask for the disclosure. In California and New York, covered providers have to give written cost and term disclosures with the offer (California DFPI, NY DFS).
- Search court records. Search the company name with "merchant cash advance" in federal and state court records and on the FTC site. The FTC sued one MCA operator for misstating terms and making unauthorized withdrawals, and a court entered a $20.3 million judgment (FTC).
What deals have our funding partners funded recently?
These six deals were funded by one of our funding partners, not by Afterfirst. Amounts are shown as ranges, and no merchant details are shown.
| Amount | Position | Industry | State | Term |
|---|---|---|---|---|
| $350K-$400K | 4th | Manufacturing | Pennsylvania | 100 days |
| $80K-$100K | 3rd | Construction | Massachusetts | 10 weeks |
| $40K-$60K | 2nd | Automotive | Ohio | 50 days |
| $20K-$30K | 1st | Repair services | Georgia | 30 days |
| $10K-$20K | 1st | Landscaping | Illinois | 40 days |
| $200K-$300K | Renewal | Construction | California | Bi-weekly payments |
- $350K-$400K · 4th positionManufacturing, Pennsylvania · 100 days
- $80K-$100K · 3rd positionConstruction, Massachusetts · 10 weeks
- $40K-$60K · 2nd positionAutomotive, Ohio · 50 days
Show all 6 deals
- $20K-$30K · 1st positionRepair services, Georgia · 30 days
- $10K-$20K · 1st positionLandscaping, Illinois · 40 days
- $200K-$300K · Renewal positionConstruction, California · Bi-weekly payments
Past deals don't predict the amount, cost, term or timing of any offer you get.
How does one application reach many funders?
We work with a network of funders that cover many types of funding need, and we match each business based on its file.
Between them, our funders cover:
- Most industries, from restaurants and retail to trucking, construction and medical practices
- Small shops and larger businesses
- First position, plus stacked and second position files
- Lower and higher credit scores
- Files with NSFs or overdrafts on recent statements
- Startups, newer businesses and long-established ones
That's why we can shop every kind of file: the good, the bad, the ugly and everything in between. You don't need a perfect file to send one application.
How does matching on your file work?
- You send one application with recent business bank statements.
- We read your file: deposits, industry, time in business, credit and any advances you're still paying.
- We shop it to the funders whose rules fit that file, not to every funder on the list.
- You compare the offers that come back, each with its total payback in dollars and its payment schedule.
- You choose, or you walk away. Funders make every decision on approval and terms.
We look for the funders whose rules fit your file. Applying won't affect your credit. Compare offers line by line.
Why doesn't this guide rank MCA companies?
The funder that's right for a restaurant with steady card sales can be wrong for a contractor with lumpy invoices. A ranked list can't see your deposits or your open balances. Offers on your own file can. And because funders pay us, we'd rather show you real offers than tell you whom to pick.
What should you check on any MCA offer?
- Total cost in dollars. Factor rates often run about 1.2 to 1.5; the FTC describes the factor as often 20% to 50% of the amount. Example (sample numbers): $40,000 at a factor of 1.35 pays back $54,000, a $14,000 cost, or $1,350 a week over 40 weeks. Check yours with the factor rate calculator.
- Holdback and schedule. The share of sales or the fixed debit, daily or weekly. For example only, a 15% holdback on $2,000 of daily card sales is $300 a day. Test the payment against your slowest month. See daily holdback percentage.
- Requirements. Time in business, deposits, credit and open balances. Ours get matched for you; elsewhere, check minimums before applying.
- Stacking and position policy. Ask whether they fund behind an open advance and get it in writing. See MCA stacking and positions.
- Reviews. Look for patterns in complaints and responses on sites like Trustpilot or the BBB, not just the score.
- Red flags. No total payback in writing, pressure to sign within the hour, fees you pay before funding, blank contract terms, or a reconciliation promise that isn't honored when sales drop, a concern the FTC has raised. See MCA scams.
Side-by-side offer checklist
| Item | What to ask | Sample or source |
|---|---|---|
| Factor rate | What multiple sets the total payback? | About 1.2 to 1.5 (FTC) |
| Holdback | What share of sales, or what fixed debit, will they collect? | Your offer states it; ask for the share or the fixed debit in writing |
| Term | How long until it's repaid at your usual sales? | The term or estimated term is a required disclosure in California |
| Fees | Which fees come out at funding, and how much reaches your account? | California requires the total amount of funds provided and the total dollar cost |
| Prepayment | Is there a discount, or any cost, for paying early? | California requires a prepayment policy disclosure (DFPI) |
| Position | Will they fund behind an open advance, or pay it off? | Ask for the answer in writing |
What are the pros and cons of a merchant cash advance?
An MCA trades a share of future sales for cash now. It's built around your deposits, and it costs more than bank financing.
Pros
- Approval leans on deposits, not just credit.
- Payments can track sales when the contract allows reconciliation.
- No equipment or property is pledged as collateral.
Cons
- Total cost is higher than bank or SBA financing (NerdWallet puts effective APRs at 40% to 350%).
- Daily or weekly debits squeeze slow weeks.
- Funders commonly file a UCC lien on business assets.
- Paying early often doesn't lower the total payback.
What do MCA companies usually require?
Most funders want a few months of business history, steady deposits and a credit score that can be fair or poor. The figures below are the ranges NerdWallet's MCA comparison lists for named providers.
| Requirement | Typical listed minimum | Source |
|---|---|---|
| Time in business | 3 to 12 months (one provider asks for 3 years) | NerdWallet comparison |
| Credit score | 500 to 600; one provider doesn't check credit | NerdWallet comparison |
| Monthly sales | About $10,000, though some go as low as $2,500 | NerdWallet explainer |
How do two offers compare in dollars?
Example only. These are sample numbers, not a real offer or a funded deal.
Compare total payback first, then the weekly payment. A lower factor can come with a shorter term and a bigger debit.
| Sample offer | Advance | Factor | Total payback | Payment | Cost |
|---|---|---|---|---|---|
| Offer A | $40,000 | 1.35 | $54,000 | $1,350 a week for 40 weeks | $14,000 |
| Offer B | $40,000 | 1.25 | $50,000 | About $2,083 a week for 24 weeks | $10,000 |
Offer B costs $4,000 less in total, but its weekly payment is about $733 higher. If your slowest month can't carry about $2,083 a week, Offer A may be the safer pick even though it costs more.
What are the risks of choosing the wrong MCA company?
- Cost. Paying back 20% to 50% more than you receive is common, and the effective APR can be far higher when the term is short (FTC, NerdWallet).
- Payments that don't flex. Some contracts set a fixed daily or weekly debit. If sales drop, ask in writing how reconciliation works before you sign, and read how holdback works.
- Stacking. Taking a second advance on top of the first adds a second payment to the same deposits. See stacking and positions.
- Default terms. Many MCA contracts include a personal guarantee. Read what it covers and what counts as a default, and have an attorney review terms you don't understand.
What are the alternatives to a merchant cash advance?
- SBA-backed financing. The SBA's 7(a), 504 and microfinance programs often cost less, but they take longer and ask for more paperwork (SBA).
- A business line of credit. You draw only what you need and pay on what you use.
- Equipment financing. If the money is for a machine or vehicle, the equipment itself can secure the deal.
- Consolidation. If you already carry more than one advance, see consolidation and refinance.
What do owners ask about choosing an MCA company?
Which MCA company is easiest to get approved with?
The one whose minimums your file already meets. Listed minimums start around 3 months in business and a 500 credit score (NerdWallet), so matching beats guessing.
How much does a merchant cash advance cost?
Multiply the amount by the factor rate. $40,000 at a 1.35 factor pays back $54,000, so the cost is $14,000 (sample numbers).
What credit score do you need for an MCA?
Often 500 to 600, and some providers don't check credit at all, according to NerdWallet's comparison. Deposits usually matter more.
How much can you get from an MCA?
It's sized to your deposits. The six partner deals above ranged from $10K-$20K up to $350K-$400K.
How do you compare two MCA offers?
Line them up on total payback, weekly payment, term and fees, then test the payment against your slowest month. The chart above shows how.
How do I compare merchant cash advance companies?
Get written offers on your own file and check each one on the same three points: total payback in dollars, the size and schedule of the debit, and fees taken out before funding. The offer with the lowest payback and a debit your slowest month can carry is the one that fits.
What kinds of funders does Afterfirst work with?
Our funders cover almost every type of funding need. We match each business to the ones that fit its file.
Can you help if my file isn't perfect?
Yes, we shop imperfect files. Our funders cover lower credit, NSFs, stacked and second positions, startups and newer businesses, and a wide range of industries; funders decide on approval and terms.
Does applying affect my credit?
Applying won't affect your credit.
How does Afterfirst get paid?
Funders pay us; owners never pay us. Funders pay a membership and a commission when a deal funds.
Where do these facts come from?
- FTC: Small business financing, Staff Perspective outlines issues
- California DFPI: Commercial Financing Disclosures (SB 1235)
- California DFPI: Advisory to small businesses on merchant cash advances
- NY DFS: commercial finance disclosure rules (23 NYCRR 600)
- FTC: FTC v. RCG Advances, LLC (S.D.N.Y. 1:20-cv-04432)
- U.S. Small Business Administration: funding programs
- NerdWallet: merchant cash advance companies (credit, time-in-business and APR ranges)
Sample ranges and the worked example ($40,000 x 1.35 = $54,000; $54,000 - $40,000 = $14,000; $54,000 / 40 = $1,350) are sample numbers from the Afterfirst file team. The two-offer table is an example only. Funder network and the 130+ deals line: Afterfirst partner records.
Send one file.
See what fits.
Call 877-FUND-654 with questions.