Revenue-based financing to grow your business.

Grow your business based on future income with revenue-based financing, also called business and merchant cash advances.

$
Applying is free and won't impact your credit*
Loan Amount
$5k–$2 million
Time to Fund
As soon as 24 hours
Loan Terms
3–36 months

What is a business cash advance?

Also called revenue-based financing, a business cash advance is a form of funding that offers businesses quick access to funds by borrowing against the money they will make. That borrowed money is then repaid through a fixed daily percentage. This type of funding may also be easier for some new businesses to obtain than traditional small business loans.

How a business cash advance works.

The repayment process for a cash advance differs from that of a normal loan or even a credit card. Instead of making monthly set payments, your funder will withdraw a “fixed daily or weekly percentage” — a preset amount — from your account daily. The daily payments are used to repay the amount of the advance plus the factor rate of the funding.

What is a merchant cash advance?

A merchant cash advance is a form of business financing that provides an advance on a business’s future credit card sales. Cash advances are repaid automatically through a percentage of the business’s daily credit card deposits.

Since merchant cash advances are flexible and carry no restrictions on how the borrower can use them and tend to fund quickly, they’ve often been used by businesses facing unexpected, cash-crunch emergencies.

How does a merchant cash advance work?

Once a business has received the advance from the financier, repayment begins. Each day, the funder will withhold the agreed-upon percentage of the business’s credit card deposits.

There are two ways the repayment of a merchant cash advance can be processed:

Split withholding repayment: This method is most popular and permits a financier to take their agreed-upon percentage directly out of a business’s daily credit card revenue.

Lock-box repayment: The business’s daily deposits go straight to an account overseen by the funder and each day, the business receives its share of the previous day’s deposits.

Business cash advance vs. merchant cash advance

Functionally, a merchant cash advance is similar to business cash advances, except the small business borrower receives an advance on future credit card sales. A business cash advance is repaid as an automated, fixed daily or weekly withdrawal based on cash flow.

The funders we work with primarily offer business cash advances with a few offering the option of a credit card split similar to an MCA. This method permits the financier to take their agreed-upon percentage directly out of a business’s daily credit card revenue.

Is a business cash advance right for you?

There are some situations where a cash advance might be the RIGHT funding option, like:

- Businesses with low credit scores.
- Newer businesses with limited credit history.
- Businesses that need cash quickly.

Minimum requirements for a short-term loan.

Credit score
500 or higher
monthly revenue
$8K+
time in business
6+ months
Quickly estimate your funding options.
Time In Business
0 - 6 Months
6 - 12 Months
1 - 3 Years
3+ Years
Monthly revenue
Industry
Credit Score
Business type
Legal partnership
LLC
Corporation
Sole proprietor
Congrats--it looks like you qualify.*

Based on your business information you could qualify for up to $ 52,000 in funding

Funding amount *

$ 36,000 - $ 52,000

*Amount is an estimate only using the information provided Businesses like yours typically receive offers like these.
Compare your funding options today.
Apply now

Many businesses don't qualify for funding for all kinds of reasons. A few factors could include:

Not enough revenue
Not enough time in business
Credit score is too low

*Qualification criteria, rates, and other funding terms will vary depending on the type and location of your business, and upon other factors. This is not a guarantee of funding, and it should not be relied upon as an accurate assessment of the availability or terms of the represented funding products.

How much can I qualify for?

Not sure what you need or what funding options are best for you? Use our simple calculator to get a rough idea of your options with no commitment, and apply when you’re ready.

How to apply for a business cash advance.

Tell us about your business.

Answer a few simple questions and complete the application in minutes.

Submit your application.

We’ll present your application to our marketplace 75+ lenders. Applying is free and won’t impact your credit score.

Compare offers.

Find the funding option with the terms that best fit your small business goals.

Get funded.

Once you accept, funding can hit your bank account in as little as 24 hours.

12+ years of serving small businesses.

Get the answers and the funding you need with support all along the way.

$16+ billion

in small business funding facilitated in the last decade.

4.8 stars

21,000 Trustpilot® reviews.
50% repeat customers.

400,000+

total small business loans funded in the last decade.

FAQs

Find answers to some commonly asked questions about business and merchant cash advances.

Can a startup get a business cash advance?

A business cash advance is an option for startup businesses that may not yet qualify for other types of business financing. Because a business cash advance is repaid based on your business’s income, time in business and other factors that can make securing financing difficult for startups don’t apply. If your startup has a strong income, a business cash advance could be an excellent solution for your fast-capital needs.

What are the pros and cons of a business cash advance?

The benefits of a cash advance make it such a convenient form of funding. Because eligibility is based on the ability to repay the advance, the requirements for this type of funding aren’t too strict, making it ideal for new businesses or those with bad credit or lack collateral. Plus, you can get funding quickly with a cash advance. And, if you have low sales, your payments will stay low too.

The disadvantages of a cash advance can sometimes outweigh the pros. It can cost you quite a bit depending on the factor rate of the cash advance. Plus, there’s no benefit to repaying early like there might be on other funding options.

Pros:

Quick to apply
Good for borrowers with low credit
Low revenue = low payments

Cons:
High cost of capital
Shorter term lengths
Frequent payments

What are the pros and cons of a merchant cash advance?


Before taking a cash advance or any funding option, compare it with the other funding options available. Merchant cash advances are a unique form of financing with benefits and drawbacks:

Merchant Cash Advance Pros

  • Speed of funding: Cash advances are quick to fund and can often provide cash within 24 hours of approval.
  • Not collateralized: Generally, no collateral is required for a merchant cash advance.
  • Long business history not required: Cash advances are often pitched to newer businesses or businesses with a shorter financial history, although you may be asked to provide 3-6 months of bank statements, receivables, or daily sales records.
  • Won’t appear on a credit report: Due to the unique structure of a merchant cash advance payment, it’s actually considered a sales transaction. This designation means it won’t appear on a credit report.

Merchant Cash Advance Cons

  • Expensive: Merchant cash advances typically have higher rates than other types of business financing. A high rate or longer repayment period due to low sales can result in an overall higher cost of financing.
  • Not federally regulated: Since merchant cash advances are considered commercial transactions, they lack some regulations and requirements associated with other borrowing options.
  • Business credit may still be checked: Some financiers may check credit before approving the advance, which can impact the factor rate of the advance.
  • Doesn’t improve your credit: As mentioned above, due to the unique structure of a merchant cash advance payment, it’s considered a sales transaction and usually doesn’t appear on a credit report. But this means repayment of a merchant cash advance also won’t help build credit history or improve a credit score.

What is a business cash advance used for?

A cash advance can be used for a variety of business expenses. These may include purchasing inventory, covering emergency costs, investing in marketing efforts, managing seasonal sales fluctuations, renovating business premises, or even expanding the business. Essentially, a cash advance provides a flexible solution for any short-term capital needs, offering businesses the ability to handle unexpected costs or take advantage of lucrative opportunities quickly and effectively.

What is the difference between a loan and a cash advance?

A loan and a cash advance are two different types of financial aid used by businesses, and they come with distinct differences. A loan is a type of debt where a lender, often a bank, provides a lump sum of money upfront, and the borrower repays the amount over a set period with interest. The repayment schedule is usually monthly and the interest rate is typically fixed.

On the other hand, a cash advance is a short-term funding option where the funder provides a lump sum of money that the borrower repays through a fixed percentage of their future sales. Also, cash advances use a factor rate instead of an interest rate to calculate the total repayment amount. This makes cash advances a flexible, but often more expensive, option than traditional business loans.

What is the difference between a merchant cash advance, a term loan, and a credit card?

Here is how a merchant cash advance generally compares to business credit cards and small business term loans. Note that these qualities can change based on the specifics of the specific financing type and the applicant’s creditworthiness.

Merchant Cash Advance:

Credit Requirements: Low

Repayment frequency: Daily or weekly

Maximum financing amount: $2 million

Business Credit Card:

Credit Requirements: Medium

Repayment frequency: Monthly

Maximum financing amount: $100,000

Term Loan:

Credit Requirements: High

Repayment frequency: Monthly

Maximum financing amount: $5 million

When choosing a financing option, due diligence is essential. Also, know that funding timelines vary from funder to funder. While many funders deliver the cash advance to the borrower’s account within 24 hours, a larger merchant cash advance from some funders could take more than a week to arrive.

Ready for funding?

See what you can qualify for on the Lendio Marketplace.