What is a Merchant Cash Advance?
A Plain English Guide.

The short answer

A merchant cash advance (MCA) is a lump sum of working capital provided to a business in exchange for a percentage of its future revenue. Unlike a traditional bank loan, an MCA is not based on your personal credit score, doesn't require collateral, and can be funded in as little as 48 hours.

The approval is based primarily on one thing: your business's monthly bank deposit history. If your business consistently deposits money, you're a candidate — regardless of whether a bank has previously said no.

How does a merchant cash advance actually work?

Here's the basic mechanics:

1. You apply online and submit your last four months of business bank statements.
2. A funding specialist reviews your revenue and makes you an offer — a specific advance amount and a factor rate (more on that below).
3. You accept the offer, and the funds are deposited into your business bank account within 48 hours.
4. Repayment happens automatically via fixed daily or weekly ACH withdrawals from your business checking account, Monday through Friday.

There's no monthly statement to remember, no bill to pay manually, and no variable rate that changes on you. The repayment amount is fixed from day one.

What is a factor rate?

Instead of an interest rate, MCAs use a factor rate — a simple multiplier applied to the amount you receive. A common factor rate might be 1.25 to 1.45.

For example: if you receive a $50,000 advance with a factor rate of 1.30, the total amount you repay is $65,000 ($50,000 × 1.30). The $15,000 difference is the cost of the advance.

Factor rates are straightforward — there are no compound interest calculations and no rate changes. What you see in your offer is exactly what you repay.

Who qualifies for a merchant cash advance?

Qualification requirements are intentionally simple. At Reeve Capital, your business needs to meet three criteria:

• You are the business owner or an authorized principal
• Your business has been incorporated and operating for at least five months
• Your business bank account shows at least $5,000 in average monthly deposits

That's it. No minimum credit score requirement. No collateral. No years of tax returns.

What can the funds be used for?

There are no restrictions on how you use your advance. Common uses include purchasing inventory, covering payroll, repairing or replacing equipment, funding marketing campaigns, covering rent during a slow period, or investing in growth. Once the funds are in your account, they're yours to deploy however your business needs them.

Is a merchant cash advance a loan?

Technically, no. A merchant cash advance is a purchase of future receivables — the funding company is buying a portion of your future revenue at a discount. This distinction matters legally and regulatorily, and it's part of why MCAs can be structured and funded so much faster than traditional loans.

Reeve Capital Funding is a commercial financing broker. We connect businesses with our Cash Distribution Partner, who handles all underwriting, approval, and funding. Approval is not guaranteed and terms vary by business.