Merchant cash advances (MCAs) have been gaining popularity in recent years. The product started as a solution to finance future credit card sales. However, this product has evolved into a solution that allows companies to finance future sales of almost any kind. The term business cash advance is probably a better description.
How is the funding amount calculated?
The cash advance provider determines how much to advance your company by reviewing your past sales. The provider reviews past credit card transactions or analyzes your bank statements.
Most cash advance companies fund anywhere from 80% to 150% of your average monthly sales. This amount varies by provider and is also based on the financial strength of your company.