Plain-English guides for business owners.

What is a merchant cash advance?

A merchant cash advance (MCA) is a sale of part of your business's future receivables. A funder like Moneyfall pays you a lump sum today, called the purchase price, in exchange for a fixed dollar amount of the receivables you collect going forward, called the purchased amount.

How it differs from a loan

• No interest rate and no fixed maturity date. The amount you remit is fixed in dollars, not calculated over time.
• Tied to your receivables. Remittances estimate a set percentage of what your business collects.
• Underwritten on revenue. Approval depends mostly on your deposits and cash flow rather than your credit score or collateral.

The trade-off is cost: advances generally cost more than bank financing, in exchange for speed and flexibility. See Compare options for an honest side-by-side.

Understanding the total cost

Three numbers define every advance:

1. Purchase price: what you receive, less any disclosed fees.
2. Factor: the multiplier, for example 1.30.
3. Purchased amount: purchase price times factor, the total you'll remit.

Illustration: $100,000 at a 1.30 factor means $130,000 purchased. The cost is $30,000 plus any fees in the agreement. Because the purchased amount is fixed, remitting faster doesn't increase it.

Questions to ask about any offer

• What is the net amount I will receive after fees?
• What is the total purchased amount?
• What is the remittance, how often, and for roughly how long?
• What does the state disclosure show?

Try the numbers yourself with our calculator.

Preparing a strong application

Underwriters want to understand how much revenue your business reliably collects and how much of it is already committed. Make that easy:

• Send complete statements. All pages, for the last four months, for every account that receives business revenue.
• Include month-to-date. It shows where this month is heading.
• List every existing advance or loan. Undisclosed obligations found in statements cause delays and can change an offer.
• Explain anything unusual. A one-time large deposit, a slow month, or returned items: a short note up front saves time.
• Ask for what you need. Requesting an amount your cash flow comfortably supports leads to a faster yes and a remittance you can live with.

Multiple advances ("stacking")

"Stacking" means having more than one advance open at the same time. Each one is a separate remittance from the same revenue.

What to watch

• Add up every remittance. The total, not any single one, determines whether your cash flow can handle it.
• Read each agreement. Some agreements limit additional financing, and breaching that can have consequences.
• Be candid with funders. Disclosing every position gets you an offer sized to what your business can actually support.

Moneyfall reviews files with existing positions through 6th position, priced on the cash flow left after current remittances. See Existing positions.

Protecting your payments

Payment-instruction fraud is when someone impersonates a funder, vendor or attorney and asks you to send money to a new account. It's one of the most common ways businesses lose money.

• Moneyfall will never change its payment instructions by email.
• Before sending any wire or payoff, call us at (917) 846-1535 using the number on this website, not one in an email.
• Check the sender. Our email comes only from @moneyfall.com.
• Pay only according to a written payoff letter you have confirmed by phone.