Financing program
Merchant Cash Advance
A merchant cash advance purchases a portion of future card receivables. Repayment scales with sales, which suits businesses with heavy seasonal swings, and it costs more than term debt.
What is merchant cash advance for a food business?
A merchant cash advance purchases a portion of future card sales, and repayment is a percentage of daily or weekly card volume rather than a fixed payment. It funds fast and costs more than term debt, so compare the total dollars repaid, not the factor rate.
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
AvailabilityMerchant cash advance and revenue-based structures are available through funding partners in most states and are not offered to businesses in Texas, Virginia, or Connecticut.
Pick a state to see whether this program is offered there, and what changes if it is limited.
| Detail | |
|---|---|
| Typical amount | 5,000 to 250,000 |
| Term | Repaid as card volume arrives |
| Time to funding | 1 to 3 business days |
| Documents | Application, bank and processing statements |
| Cost structure | Factor rate, highest total cost |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Where it fits
- /Fast access
- /Seasonal revenue
- /Credit profiles that do not fit bank criteria
How the program works
- /Remittance is a percentage of daily or weekly card volume.
- /Funding can move quickly because underwriting centers on processing history.
- /Cost is expressed as a factor rate, not an interest rate. Compare total dollars, not percentages.
What it looks like in practice
A beachfront bar funds a summer staffing ramp and repays faster during peak weeks.
A food truck covers an emergency engine rebuild during festival season.
Cost of capital calculator
Merchant cash advance true cost, side by side
A factor rate is not an interest rate. The dollars are fixed the moment you sign, and the annualized cost moves with how fast card volume pays it back. Run a strong sales season against a slow one and watch the APR move while the total stays put.
Start from a common setup
Load a starting point, then edit any field in either column. Presets are examples, not offers.
Scenario A
Ask for it in writing.
Daily weekday remittance is 5. Weekly is 1.
Scenario B
Ask for it in writing.
Daily weekday remittance is 5. Weekly is 1.
Sensitivity: move one driver at a time
| Factor rate | Total repaid | Change |
|---|---|---|
| 1.05 | $52,500 | -$15,000 |
| 1.24 | $62,000 | -$5,500 |
| 1.43 | $71,500 | +$4,000 |
| 1.61 | $80,500 | +$13,000 |
| 1.80 | $90,000 | +$22,500 |
| Repayment window | Total repaid | Change |
|---|---|---|
| 2 months | $67,500 | — |
| 7.5 months | $67,500 | — |
| 13 months | $67,500 | — |
| 18.5 months | $67,500 | — |
| 24 months | $67,500 | — |
Change is measured against cost of capital in dollars in the scenario the sliders control. Moving a slider edits that column, so the side-by-side updates with it.
Side by side
Both scenarios land on the same cost of capital in dollars. Change an input in one column to compare.
The arithmetic
Total repaid = advance x factor. Cost = total repaid - advance. Remittance = total repaid / number of remittances. APR is solved from the payment stream by internal rate of return, then annualized as periodic rate x periods per year.
Sources
- 1Factor rates are not interest rates and do not disclose an APRFederal Trade Commission. FTC guidance on merchant cash advance and small business financing marketing, on cost disclosure and the difference between a factor rate and a periodic interest rate.
- 2Annual percentage rate definition, 12 CFR 1026.22Consumer Financial Protection Bureau, Regulation Z. APR is the nominal annual rate that discounts a payment stream back to the amount advanced. We solve it numerically from the payment schedule and multiply the periodic rate by the number of periods per year.
- 3California and New York require APR disclosure on commercial financingCalifornia Department of Financial Protection and Innovation. Commercial Financing Disclosure Regulations under SB 1235 require an annualized rate disclosure on sales based financing, which is why an estimated APR is the right comparison across offers.
Education only: this calculator runs your own inputs through published arithmetic so you can compare merchant cash advance scenarios before you talk to anyone. It is not a quote, a promise to lend, an approval, or an indication of offers to come. Real terms come from a funding partner in writing after underwriting.
Availability: Program availability varies by state. Merchant cash advance and other revenue-based financing structures are not offered to businesses in Texas, Virginia, or Connecticut.
Compare all 6 programs
How merchant cash advance compares against every other program on amount, term, speed, cost structure, and what underwriting expects. Compare total dollars repaid rather than the monthly payment.
| Typical amount | Term | Time to funding | Cost structure | |
|---|---|---|---|---|
| Equipment Financing | 5,000 to 500,000 | 24 to 84 months | 1 to 5 business days | Fixed monthly payment |
| Working Capital | 10,000 to 500,000 | 3 to 18 months | 1 to 3 business days | Fixed daily, weekly, or monthly payment |
| SBA Loans | 50,000 to 5,000,000 | 10 to 25 years | 3 to 12 weeks | Amortized interest, lowest payment of any program |
| Business Line of Credit | 10,000 to 250,000 | Revolving, reviewed periodically | 2 to 7 business days | Interest on the drawn balance only |
| Merchant Cash Advance | 5,000 to 250,000 | Repaid as card volume arrives | 1 to 3 business days | Factor rate, highest total cost |
| Buildout and Expansion | 50,000 to 2,000,000 | 36 to 84 months | 1 to 4 weeks | Fixed payment, often with a draw schedule |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
| Time in business | Credit | Revenue | Collateral | |
|---|---|---|---|---|
| Equipment Financing | Month 1 with a down payment, common by month 6 | Options below 600, best terms above 700 | No minimum when the quote and asset are strong | The equipment itself |
| Working Capital | 6 months of deposits | Options below 600, pricing improves above 650 | About 15,000 per month in deposits | General business lien, no specific asset |
| SBA Loans | 2 or more years, exceptions for acquisitions | 660 and above with clean recent history | Documented profit and debt service coverage | Business assets, often real estate, plus a personal guarantee |
| Business Line of Credit | 12 months | 650 and above for most limits | Consistent monthly deposits across 12 months | General business lien |
| Merchant Cash Advance | 4 to 6 months of card processing history | Options in the low 500s | About 10,000 per month in card volume | Future card receivables |
| Buildout and Expansion | 12 months, or a funded project with an executed lease | 650 and above for most structures | Sized to the project and the operator contribution | The project, with 10 to 30 percent operator contribution |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Every request
- /Completed program application with ownership details
- /3 to 6 months of business bank statements
- /Time in business and entity details
Equipment and buildout
- /Vendor quote including delivery, installation, and freight
- /Contractor bids and the draw schedule on construction
- /Executed lease for the space
SBA and conventional term
- /3 years of business and personal tax returns
- /Interim profit and loss statement and balance sheet
- /Debt schedule and personal financial statement
- /Purchase agreement and seller financials on an acquisition
Guides and calculators for merchant cash advance
Merchant Cash Advance questions
How does repayment work?
A fixed percentage of daily or weekly card sales is remitted automatically until the purchased amount is delivered. Slow weeks remit less, busy weeks remit more.
What is a factor rate?
A factor rate is a multiplier on the advance amount. A 30,000 advance at 1.30 means 39,000 total repaid. Compare total dollars against other options, not the rate itself.
How fast can it fund?
Usually 1 to 3 business days, which is why it is common for emergency repairs and equipment failures.
Who should consider an advance?
Operators with strong card volume, heavy seasonality, or a credit profile that does not fit bank criteria, and who understand the higher total cost.
Can an advance be refinanced later?
Yes. Operators frequently refinance advances into SBA or term debt once they qualify, which lowers the payment substantially.