Loan Comparisons

Choosing between MCA and term loan depends on your situation:

Merchant Cash Advance:

Best When:

• ●Need funding today/tomorrow
• ●Have strong card sales
• ●Credit score under 650
• ●Revenue fluctuates seasonally
• ●Don't want fixed payments

Cost: Higher (30-80% effective APR) Speed: Same day to 48 hours Credit needed: Minimal Payment: % of daily sales (flexible)

Term Loan:

Best When:

• ●Can wait 1-4 weeks
• ●Have steady revenue
• ●Credit score 650+
• ●Want predictable payments
• ●Need larger amount

Cost: Lower (8-30% APR typically) Speed: 1-4 weeks Credit needed: 650+ typically Payment: Fixed monthly

Side-by-Side Comparison:

Decision Framework:

Choose MCA if:

• ●You need money in 48 hours or less
• ●Your credit is below 650
• ●You prefer flexible payments
• ●You have strong card sales

Choose Term Loan if:

• ●You can wait 2+ weeks
• ●Your credit is 650+
• ●You want lowest cost
• ●You prefer predictable budgeting

Can't Decide? Consider: If you qualify for a term loan and can wait, it's almost always the better financial choice. MCA's value is speed and accessibility, not cost.

These are fundamentally different products. Here's how to choose:

Business Line of Credit:

What It Is: Revolving credit you draw from as needed, like a business credit card.

How It Works:

• ●Get approved for a limit ($50K)
• ●Draw what you need ($20K)
• ●Pay interest only on $20K
• ●Repay and draw again

Best For:

• ●Ongoing working capital needs
• ●Unpredictable expenses
• ●Seasonal cash flow management
• ●Emergency access to capital

Typical Terms:

• ●Limits: $10K-$250K
• ●Rates: 7-25% on drawn amount
• ●Revolving (reusable)

Term Loan:

What It Is: Lump sum with fixed repayment schedule.

How It Works:

• ●Receive full amount upfront ($50K)
• ●Fixed payments over set term
• ●Pay off and it's done
• ●Need new loan for more

Best For:

• ●Specific one-time purchases
• ●Expansion projects
• ●Equipment
• ●Known, planned expenses

Typical Terms:

• ●Amounts: $25K-$500K+
• ●Rates: 6-30%
• ●Terms: 1-5 years

When to Choose Each:

Have Both? Many businesses maintain:

• ●Term loan for major purchases
• ●Line of credit for working capital

This provides structure AND flexibility.