Merchant cash advance FAQ, answered honestly.

A merchant cash advance (MCA) is the sale of a portion of your business's future receivables to a funder at a discount. The funder pays you a lump sum up front, and your business delivers the agreed purchased amount back through small daily or weekly payments based on a share of your sales. It's underwritten mainly on your cash flow, not collateral. The full picture is in the merchant cash advance guide.

No. A merchant cash advance is a purchase of future receivables, not borrowed money. There's no interest rate and no fixed repayment date. The cost is a fixed amount set up front by a factor rate, and payments are based on an agreed percentage of your sales. For how the two products differ, see MCA vs. business loan.

You apply with a short application and your recent business bank statements. An underwriter reviews your deposits, balances, existing advances and credit. If approved, you get an offer showing the funded amount, the purchased amount and the payment. You sign, the funds are sent to your business account, and fixed payments run automatically until the purchased amount is delivered. See how it works.

InstaFunders is a direct merchant cash advance funder based in Miami, Florida. We fund businesses across the United States, except those located in Utah, New York and Connecticut, with advances from $10,000 to $2,500,000. Our underwriters review each file themselves and work to get to a responsible yes. More on the about us page.

Almost any business purpose: payroll, inventory, equipment, marketing, expansion, or bridging a slow season. The best uses pay for themselves within the term, because the advance is short. It's a poor fit for covering ongoing losses. See what businesses use funding for for examples by purpose.

The cost is the difference between the funded amount and the purchased amount, set by a factor rate. As a hypothetical, $100,000 at a factor of 1.40 means delivering $140,000, so the cost is $40,000. That figure is fixed before you sign and doesn't grow. MCAs cost more than bank credit; you're paying for speed and flexibility. Try the cost calculator.

A factor rate is a multiplier, usually written as a decimal like 1.30, applied to the funded amount to give the purchased amount: the total you'll deliver. Unlike an interest rate, it's applied once and doesn't compound over time. Factor rates vary with time in business, deposit consistency, existing advances, credit and industry. See factor rates explained.

The hard stop number is what InstaFunders calls the purchased amount: the total of future receivables your business sells us. It's fixed before you sign, it's shown on your offer, and it never grows, even if the advance takes longer to deliver than expected. Once it's delivered, payments stop.

An APR annualizes a cost. Because an advance is short (up to 10 months with InstaFunders), a fixed cost spread over a few months converts to a high annual figure. That's the real trade-off for speed and funding that doesn't depend on collateral. Some states require funders to show an estimated APR; see state disclosures.

Compare the net funding you'll actually receive against the purchased amount you'll deliver, then look at the payment, how often it's collected and the expected term. Check for fees and whether early payoff discounts or reconciliation are offered. Comparing only the factor rate or only the payment can mislead. See how to read an MCA offer.

12 months or more in business, $50,000+ in average monthly deposits with at least 5 deposits a month, a credit score of 500 or higher, an average of no more than 5 negative-balance days a month, and a business located outside Utah, New York and Connecticut. Everything is on the requirements page.

Often, yes. InstaFunders considers credit scores from 500, because an advance is based on your future sales rather than borrowing. Strong, consistent deposits and healthy balances matter more than a perfect score, though credit still affects the offer. Read business funding with bad credit.

Not with InstaFunders. We need 12 months or more in business, because underwriting relies on a track record of deposits in your bank statements. A newer business may be better served by an SBA microloan, a business credit card or equipment financing until it has that history. See funding comparisons.

Yes. Second position and onward is InstaFunders' strong suit, and first-position deals are considered case by case. We review all of your existing payments together to make sure a new advance fits your cash flow. Businesses funded in the last 30 days are reviewed case by case. See second-position funding.

InstaFunders doesn't fund businesses located in Utah, New York and Connecticut. We also don't fund these industries: trucking and logistics, auto sales, nonprofit organizations, debt consolidation and credit repair, debt collection, cannabis, publicly traded companies and law firms. If your business is outside those, check the other requirements on the requirements page.

InstaFunders funds $10,000 to $2,500,000. The amount you qualify for depends mainly on your monthly deposits and how consistent they are, plus your existing advances, balances, time in business and credit. Advances from about $500,000 up to $2,500,000 go to established businesses with deposits well above the minimum; see large funding.

A signed and dated application and your last three months of business bank statements plus month-to-date. California businesses send four months. Include statements for any and all associated businesses and business bank accounts. The bank statements guide explains what underwriters look for.

After approval and before funding, we ask for a driver's license and voided check for all owners, and a current A/R aging report and/or your most recent credit card processing statement. Having these ready shortens the time between approval and funds reaching your account.

In as little as 24 hours after approval. The biggest factor is how complete your application is: every statement, every account and the stipulations ready. Missing pages or unexplained deposits are the usual reason a file slows down. See how fast you can get funded.

Underwriting includes a review of each owner's credit. How a credit check appears on your report depends on the type of inquiry used, so ask when you apply if it matters to you. In an MCA decision, strong and consistent deposits carry more weight than your score alone, and scores from 500 are considered.

Apply online at the apply now page or call 844-828-7986. The application takes a few minutes; then send your bank statements. An underwriter reviews your file and comes back with an answer, and if approved, an offer showing your funded amount, purchased amount and payment.

Usually by a fixed ACH debit from your business bank account, each business day or once a week. The amount is based on an agreed percentage of your sales and continues until the purchased amount is delivered. You don't need to send anything manually. See how MCA payments work.

In many cases, yes. Weekly payments suit businesses whose deposits arrive in fewer, larger amounts. If your business's other advances are already weekly, weekly is available with InstaFunders too. The weekly amount is roughly five daily payments. See weekly payments.

Because an advance is a purchase of a share of your sales, payments are meant to track your revenue. If sales fall, contact your funder and ask about a reconciliation, which reviews your actual receipts and can bring payments in line with what you're bringing in. Raise it early rather than letting payments bounce. See reconciliation.

If the account doesn't have enough when the debit runs, the payment returns unpaid and your bank may charge an NSF fee; your agreement may also set out a fee. One returned payment isn't the end of the world, but call your funder straight away. Repeated returns without contact can lead to a default under the agreement.

Yes, and with InstaFunders early payoff discounts are available case by case. Because the purchased amount is fixed, paying early doesn't reduce the cost unless the funder offers a discount, so ask before you sign. See paying off an MCA early.

Yes. A renewal is a new advance that pays off the remaining balance of your current one; you receive the difference as net funding and move to a single payment. You can renew once you've paid in 60% of your current advance with a solid payment history. Each is underwritten on your current statements. See renewals.

A UCC-1 is a public notice filed with a state that a party has an interest in certain business assets, here the receivables sold under the agreement. Funders commonly file one when an advance funds. It's typically terminated once the purchased amount is delivered. See UCC filings explained.

Possibly, in one of two ways: a renewal, which settles your current balance and replaces it with a new advance, or a second-position advance, which runs alongside your existing one. Which fits depends on how far into the advance you are and what your deposits support. Compare them in funding programs.

It can be, when it funds something that earns its cost back within the term and the payments fit comfortably in your cash flow. It isn't when it would cover ongoing losses or stack payments past what your deposits support. If a bank or SBA loan fits your timeline, it will usually cost less. See responsible funding.