Getting money for your small business can be tough. Banks have strict rules and slow approvals, so many business owners look for other options, like Merchant Cash Advances (MCAs).
With an MCA, you get a lump sum of cash in exchange for a percentage of your future sales. It’s a flexible option if your business has steady income. But to qualify, you need to meet certain requirements and prepare well. This guide will help you improve your chances and secure the funding you need.
Step 1: Understand What a Merchant Cash Advance Really Is
Before applying, understand what you’re signing up for. An MCA isn’t a loan, it’s an advance on your future sales.
You get a lump sum of cash, and in return, the provider takes a set percentage of your daily or weekly sales until the amount is repaid, plus a fee. This fee is a factor rate, meaning it’s fixed from the start and doesn’t increase over time.
MCAs work well for businesses with steady sales but bad credit or no collateral. Just remember, they take a cut from your daily cash flow, so plan ahead. That’s why it’s important to choose the right funding provider. MCA providers like Advancery specialize in tailored financial solutions, helping businesses access capital while managing cash flow effectively.
Step 2: Know the Basic Qualification Criteria
Different providers have different requirements, but most MCAs are approved based on your sales, not your credit score.
Lenders usually look at how much money your business makes each month. Most expect at least $10,000 to $15,000 in gross sales. They also check how long your business has been running, usually, it needs to be at least 3 to 6 months old, though some prefer a full year.
Having steady sales, especially from card payments, is another big plus. Some providers might also ask for read-only access to your business bank account to review your daily balances and deposits.
If your sales are strong and consistent, you’re already on the right track.
Step 3: Prepare the Right Documents
Applying for an MCA is faster than getting a bank loan, but don’t confuse that with “no paperwork.”
To speed up approval, get these documents ready:
- 3–6 months of business bank statements
- 3–6 months of credit card processing statements (if applicable)
- A copy of your business license or proof of operation
- Voided business check (for deposit and repayment setup)
- Photo ID and basic business details
The more organized you are, the faster you’ll get a decision and funds.
Step 4: Review Your Daily Cash Flow
Many people don’t realize this, but even if you make enough money to qualify, lenders still check if you can handle the daily repayments.
Since MCAs take payments every day or week, providers look at your average daily balance to make sure you’re not always running low on cash. If your account keeps going into the negative, your chances of approval drop quickly.
Having extra cash in your account shows lenders that you can keep up with payments without putting your business at risk.
Step 5: Clean Up Red Flags Before You Apply
Even though your credit score isn’t the main concern, some red flags can still hurt your chances. Before applying, make sure your recent bank history doesn’t show bounced checks or overdrafts. Pay off any small debts that might make lenders question how you manage cash. Also, check your business records for mistakes like name mismatches or outdated addresses, as these can slow down the process.
Spending just a day or two fixing these details can improve your chances of approval and even help you get better terms.
Step 6: Compare Providers
Not all MCA providers are the same. Some are upfront about their terms, offer quick funding, and have fair repayment plans. Others? Not so much.
When comparing offers, look at:
- The factor rate (not just the total repayment amount)
- Repayment frequency and method
- Any early repayment penalties
- Total holdback percentage (how much of each sale they’ll take)
Also, check if they report to any business credit bureaus; it might help your credit profile.
Step 7: Know When to Say “No”
An MCA can be a quick fix for cash flow problems, but it’s not always the best choice for long-term financing.
If your profits are already small or your sales go up and down a lot, daily repayments could put more stress on your business than you expect. And if the total amount you have to pay back seems too high, don’t let the pressure push you into a bad deal.
Just because you qualify doesn’t mean you have to say yes.
Final Word
A Merchant Cash Advance can be a great backup when traditional loans aren’t an option, but getting approved isn’t as simple as just filling out a form.
The good news? If your business has steady sales, your paperwork is in order, and you manage your cash flow well, you’re already in a good spot.
