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Best Merchant Cash Advance Companies to Consider in 2022
Merchant cash advances give you near-instant access to cash and provide funding for emergency situations. Credit scores don’t matter as much, and there are no fixed monthly payments with merchant cash advances.
Written by:Brian T. O'Connor
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
Fact Checked by: Dr. JeFreda R. Brown, DBA, CFEI and a highly respected financial expert
A merchant cash advance is a form of lending where you pay back the loan with future debit and credit card sales. Rather than making monthly or weekly payments as you would with a traditional small business loan, the lender gets a small portion of each debit and credit card sale until the loan is paid back. Our team of financial experts reviewed and ranked the top online lenders to help you get funded. Read on to discover our choices for the seven best merchant cash advance companies.
Top 7 Merchant Cash Advance Companies
- Fora Financial - Best for Poor Credit
- Uncapped - Best for High Borrowing Limits
- Torro - Best for New Businesses
- Fundera - Best for Lender Marketplaces
- Lendio - Best for Simple Application
- Rapid Finance - Best for Loan Approval
- Credibly - Best for Fast Funding
Merchant cash advances may be a good option if you need access to capital immediately, as funds are typically in your account within one to two business days of loan approval. In this review, we highlight the rates, fees and terms of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a methodology you can use to select the best option for your needs.
Best Merchant Cash Advance Companies for 2022 - Full Overview
1. Fora Financial - Best for Poor Credit
Fora Financial is a direct lender that offers small- and medium-sized businesses with merchant cash advances and short-term business loans. Their merchant cash advances range from $5,000 to $750,000, depending on your eligibility. Fora Financial usually takes only 24 hours to approve loan applications, making it quick and easy to tap into the financing you need without waiting to receive funds.
Pros
Cons
Fora Financial’s merchant cash advances are ideal for businesses who need a large amount of capital in a short amount of time. Like all merchant cash advance lenders, fees can be steep, so this is something you need to consider. Fora Financial is among the more lenient lenders in terms of credit, however, which may make additional fees a trade-off for getting financing.
Main Features
| Term Length | No set term length |
| Repayment Period | Based on credit card sales |
| Min-Max Amount | $5,000 - $750,000 |
| Borrowing Fee | 10-30% of the loan |
| Origination Fee | Up to 2.5% |
| Late Payment Fees | $35 |
| Minimum Annual Revenue | $5,000 per month in credit card sales or $12,000 minimum in gross sales |
| Minimum Time in Business | 6 months |
| Interest Rate | Factor 1.1 - 1.3 |
| Early Repayment Discounts | Yes |
The Bottom Line
Fora Financial is a solid option for small business owners who need access to financing quickly, and for whom credit may be an issue. The application process is quick and the threshold for qualification is modest, which may make it a good fit for you.
Try Fora Financial
Read the full Fora Financial review for more details.
2. Uncapped - Best for High Borrowing Limits
While some merchant cash advance providers charge pricey factor rates and hidden fees, Uncapped uses a revenue-based financing model with a transparent flat fee that is a percentage of the loan amount. And you can still benefit from the downside protection of repaying the loan from your sales.
Pros
Cons
With Uncapped, you can borrow between $10,000 and $10 million at a flat fee ranging from 2% to 12% of the loan amount. You can repay the loan in fixed installments over a term of three to 24 months, or you can pay Uncapped 5% to 25% of your sales until the principal and fee are repaid. Either way, there are no prepayment penalties or hidden costs. There are also no minimum credit score requirements, but you’ll need to be an online business with at least six months of business history and at least $10,000 in monthly revenue to qualify.
Main Features
| Term length | Varies |
| Repayment | 5% to 25% of revenue earned |
| Min - Max loan amount | $10,000 to $10 million |
| Fixed Fee | 2% to 12% |
| Minimum Credit Score | None |
| Minimum Annual Revenue | $120,000 and process more than 40% of payments online |
| Minimum Time in Business | 6 months |
The Bottom Line
Uncapped offers an excellent alternative to traditional financing that provides downside protection without high interest rates. If you want a straightforward loan you can repay out of your sales or in installments, Uncapped is worth comparing.
Try UncappedRead the full Uncapped review for more details.
3. Torro - Best for New Businesses
Torro offers startup loans, working capital loans in a form of merchant cash advances. With startup loans you make fixed monthly payments over a specified period of time. Merchant cash advances, however, are based on your future income. Rather than worrying about monthly payments, Torro takes a percentage of your credit card sales each day.
Torro doesn’t provide as much information about the loans—such as the terms and fees you might encounter—until providing you with an offer. That said, there are some broad-strokes details that they do offer publicly.
Pros
Cons
Torro’s loan terms vary from lender to lender, which means you may get different offers with different features. Credit score requirements tend to be low, so long as you can prove your monthly revenue of $10,000 and that you’ve been in business for six months or more.
Min Features
| Term Length | 12-48 months, or until the loan is paid off |
| Repayment Period | Varies |
| Min-Max Amount | Up to $575,000 |
| Borrowing Fee | Varies |
| Origination Fee | Between 1% and 5%, depending on the loan |
| Late Payment Fees | 5% |
| Minimum Annual Revenue | $120,000 |
| Minimum Time in Business | 6 months |
| Interest Rate | 1.49 factor rate (maximum) |
The Bottom Line
Torro can be a solid option if getting money fast, despite bad credit, is a must. You’ll have to pay for the privilege, but this might be a good option if you don’t have other avenues for getting the cash you need to operate your business.
Try TorroRead the full Torro review for more details.
4. Fundera by Nerdwallet - Best for Lender Marketplaces
Fundera is not a direct lender, but rather matches you to the right merchant cash advance company for your business. They’re extremely selective about who they partner with, allowing you to know you’ll only be offered the best merchant cash advances on the market today. Fundera also offers short-term business loans, invoice factoring, SBA loans, equipment financing, and business lines of credit.
Pros
Cons
Because Fundera doesn’t originate the loans, the features will vary between lenders. You can, however, use Fundera to compare loan terms, amounts, factor rates, revenue requirements, and more. To qualify for a merchant cash advance, you’ll need a minimum credit score of 550, be in business for two years, and have annual revenue of $180,000 or more.
Main Features
| Term Length | No set term length |
| Repayment Period | Daily or weekly — usually around 15% of card sales |
| Min-Max Amount | $2,000 - $500,000 |
| Borrowing Fee | Varies |
| Origination Fee | Between 1% and 5%, depending on the loan |
| Late Payment Fees | Between 5% - 10% of the month’s missed payment |
| Minimum Annual Revenue | $180,000 |
| Minimum Time in Business | 2 years |
| Interest Rate | Factor rates starting at 1.09 |
| Early Repayment Discounts | None |
The Bottom Line
Fundera can be a great place for small business owners to begin looking for financing. The company has a reputation for helping customers pair with the right lenders—allowing you to focus on your business, not your lender.
Try FunderaRead the full Fundera review for more details.
5. Lendio - Best for Simple Application
Lendio is financing platform that helps customers and lenders connect. You don’t get financing from Lendio itself, but rather from one of its partners.
One of Lendio’s biggest advantages is how easy it is to apply. Simply fill out their cash advance application and submit four to six months of bank statements. You’ll hear back within 24 hours, and receive funding shortly after, if approved.
Pros
Cons
Lendio offers merchant cash advances from $5,000 to $200,000 with loan terms up to two years. While minimum qualifications will vary between lenders, you should aim for a minimum credit score of 550 and $10,000 in monthly revenue to increase your chances of approval.
Main Features
| Term Length | Up to 2 years |
| Repayment Period | Daily |
| APR | As low as 18% |
| Min-Max Amount | $5,000 - $200,000 |
| Borrowing Fee | No borrowing fee |
| Origination Fee | Varies by lender |
| Minimum Annual Revenue | $120,000 |
| Minimum Time in Business | 6 months |
| Interest Rate | Factor rates from 1.2 |
| Early Repayment Discounts | No |
The Bottom Line
Lendio is a strong platform for finding the kind of financing your company needs. You don’t have to worry as much about having the perfect application credentials since Lendio’s partner lenders will determine if you’re a good fit for them. When you use Lendio, you can get the specifics of each offer all in one place, which allows you to compare options to pick the best advance for you.
Try Lendio Read the full Lendio review for more details.
6. Rapid Finance - Best for Loan Approval
Rapid Finance lives up to its name, offering small business owners a quick way of accessing capital through merchant cash advances. The company has low approval requirements, which means more businesses are likely to get an offer. Rapid Finance is even willing to work with sole proprietors (outside of Pennsylvania and Oklahoma) and home-based businesses, making it a compelling option for some of the smallest businesses out there.
Pros
Cons
Merchant cash advances from Rapid Finance range from $5,000 to $500,000. Since payments are based on receivables, there is no fixed repayment term. Rather, you make daily payments based on your debit and credit card sales. To apply, you need just four things: A valid ID, a business bank account, three months of business bank statements, and three credit card processing statements.
Main Features
| Term Length | No set terms |
| Repayment Period | Daily |
| Min-Max Amount | $5,000 to $500,000 |
| Fees | Not disclosed |
| Minimum Annual Revenue | $5,000 |
| Minimum Time in Business | 6 months |
| Interest Rate | Factor rates from 1.15 |
The Bottom Line
Rapid finance can be a good option for small businesses in need of capital quick. They offer the same size advance amount as most other lenders, as well as a competitive factor rate. Bear in mind that your terms may vary, and it might be hard to get this information before you submit your application.
Try Rapid FinanceRead the full Rapid Finance review for more details.
7. Credibly - Best for Fast Funding
Credibly has been providing small businesses with financing since 2010, and has built a reputation for reliability and customer service in the years since. It takes just 10 minutes to fill out an application, and you’ll get a decision within 24 hours. If approved, you can receive your cash advance from Credibly in as little as 48 hours.
Pros
Cons
Credibly offers merchant cash advances up to $400,000. Factor rates begin at 1.09, but may be higher depending on your application. To qualify, you’ll need a minimum credit score of 500, have been in business for at least six months, and have monthly bank deposits of $15,000 or more.
Main Features
| Term Length | No set term length |
| Repayment Period | Daily based on credit card sales |
| Min-Max Amount | Up to $400,000 |
| Borrowing Fee | No borrowing fee |
| Origination Fee | 2.5% of the total loan amount |
| Minimum Annual Revenue | $180,000 |
| Minimum Time in Business | 6 months |
| Interest Rate | Factor rates from 1.09 |
| Early Repayment Discounts | Yes |
The Bottom Line
Credibly is a good option for borrowers who have decent credit, can demonstrate at least $15,000 in monthly income, and need funding within 48 hours of approval. The lender is committed to the success of your small business, and has thousands of positive reviews to show for it.
Try CrediblyRead the full Credibly review.for more details.
How We Choose the Best Merchant Cash Advance
There are several aspects to a merchant cash advance you should consider, especially when it comes to picking the best lender. These factors can help you make the right decision and are the basis for our recommendations.
- Loan features: The terms, payment options, and minimum and maximum amounts available are all important factors to consider when taking out a merchant cash advance.
- Application process: Invasiveness of application information requirements, hard-pull or soft-pull credit score impact, and funding time all play a role in the application process.
- Interest rates and fees: Different types of fees (e.g. loan origination fees) as well as minimum/maximum interest rates were taken into consideration.
- Qualification process: Minimum credit score, annual revenue, and business history requirements will help you narrow down the right lender for your merchant cash advance.
- Customer support: Accessibility to a live CSR rep, the degree of multi-channel support offered, and the availability of supplemental information and tools are something to consider.
- Online user reviews: We looked at online reviews on independent review sites like Trustpilot.
- Perks and bonuses: Specified service offerings like payment flexibility, advertising transparency, and advanced technology are a factor, too.
List of Main Features for the Best Merchant Cash Advance Companies
| Company | Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Advance Amount | Factor Rate |
| Fora Financial | 500 | 6 months | $150,000 | Up to $750,000 | 1.1 - 1.13 |
| Credibly | 500 | 6 months | $180,000 | Up to $400,000 | 1.09 |
| Uncapped | Not disclosed | 6 months | $120,000 | Up to $10 million | As low as 2% |
| Fundera | 550 | None | None | $2,000 - $500,000 | 1.15 - 1.48 |
| Torro | 680 | 6 months | $120,000 | Up to $575,000 | From 1.15 |
| Lendio | 550 | 6 months | $50,000 | $5,000 - $200,000 | From 1.2 |
| Rapid Finance | Not disclosed | Not disclosed | Not disclosed | $5,000 - $500,000 | 1.11 - 1.25 |
What Is Merchant Cash Advance?
A merchant cash advance loan is a cash advance based on your future credit and debit card sales. A lender will take a look at your daily receipts and determine how much it thinks you’ll be able to pay back plus interest, usually known as a factor rate.
To work out your total payment, you’ll need to multiply your borrowing amount by the factor rate. For example, if you borrow $50,000 and your factor rate is 1.4, you’ll pay a total of $70,000 (50,000 x 1.4). As you can see, rates can be high, but merchant cash advances are incredibly convenient.
How Does a Merchant Cash Advance Work?
Merchant cash advance companies work in a slightly different way compared to conventional business lenders. In simple terms, a merchant cash advance requires your business to sell your future credit and debit card sales at a discounted figure. You then get access to a lump sum of capital, and payments are made based on future sales.
The holdback – the percentage of your daily card sales – will be sent directly to the lender via your card terminal provider, which means that you have no risk of missing payments.
Merchant Cash Advance Requirements
Since the lender knows roughly how much you can afford based on your credit card transactions, credit scores aren’t as important. Usually, those with scores of 500 or above will qualify. Monthly minimum revenue requirements vary considerably between lenders, but usually range between $2,500 and $15,000. Most lenders also want you to be in business for at least six months.
Applying for a merchant cash advance will not impact your credit score, allowing you to shop around before settling on a lender.
How to Apply for a Merchant Cash Advance
Generally, the application process for a merchant cash advance is much more streamlined than other types of lending. Here are the steps to applying for a merchant cash advance:
- Step one - Submit basic personal details to your chosen lender, including the preferred borrowing amount.
- Step two - The lender will ask for verification of your credit and debit card receipts, usually for the previous 12 months. You can provide this via your business bank statements or via records from your approved payment processor.
- Step three - Lenders may ask for additional information, like your company structure and general financial health.
- Step four - The lender will make a decision within a few hours of submitting your application. If approved, funding is usually dispersed within 24-48 hours.
Merchant Cash Advance Legal Issues
Some people have called the legitimacy of a business cash advance into question, claiming this type of alternative funding is illegal. In the U.S., the Federal Trade Commission (FTC) has launched a thorough investigation into cash advance loans due to potentially unfair contract terms imposed by online lenders.
However, the reality of the matter is that merchant cash advances are not meant to be viewed as loans, and are therefore almost wholly unregulated. They aren’t subject to usury laws or banking laws such as the Truth in Lending Act.
Because of this, lenders don’t need to take credit scores into account and borrowing amounts are almost entirely based on sales figures. This lack of regulation means interest rates and fees can be incredibly high and many companies can often end up trapped in cycles of unpayable debt. Always check your agreement carefully and make sure you’re confident of meeting the repayments.
Merchant Cash Advance Pros and Cons
Pros
- Fast funding - Most lenders will be able to make an instant decision once you’ve submitted your documentation. This means small businesses can have access to a lump sum of cash within 24 hours of applying.
- Unsecured lending - Almost all merchant cash advances are unsecured, meaning your assets aren’t at risk if you default.
- Payments scale with sales - Most agreements will allow payments to fluctuate with sales, meaning that when your sales dip, so do your payments. This makes it easier to manage cash flows.
- Generous borrowing amounts - Borrowing amounts range from $2,000 up to $10 million depending on the lender. Typically, the more monthly revenue you have, the more you’ll be able to borrow.
- Easy application process - As long as you have the right documents on hand, you can finish an application in around 10 minutes.
Cons
- High APR - The factor rates applied here often mean interest rates can run into triple digits. There’s no denying this is a convenient type of borrowing, but it’s very expensive. If you’re not careful, you could get trapped into a cycle of debt.
- Cash flow issues - In some cases, small businesses may struggle to make daily deductions. Some might end up being unable to pay unexpected expenses or daily operating costs if a significant portion of sales go to repaying loans.
Alternatives to Merchant Cash Advances
The fees associated with merchant cash advances are high, making them one of the most expensive forms of borrowing. If you have decent credit, you may want to look into other forms of financing, as well.
Here are some alternatives to merchant cash advances worth considering.
Low (or Zero) Interest Credit Cards
- Promotional interest rates may end up costing you less than factor rates.
- Ideal for candidates with good credit
- Can provide quick funding, especially if you get your card number right away
- Requires you to repay your debt quickly to avoid interest charges
Learn more about Business Credit Card Funding >>
Invoice Factoring
- Ideal for businesses with outstanding invoices that need capital
- Lenders own your invoices and pay you a percentage of their worth up-front
- Factor charges are a fraction of what merchant cash advances cost
- Generous borrowing amounts available
Here are the best invoice factoring companies of 2022 >>
Equipment Financing
- Ideal for last-minute equipment purchases
- Less flexibility with how you use the funds
- Easy qualification, even with fair credit
- No collateral required (purchased equipment serves that role)
- Interest rates typically lower than merchant cash advance factor rates
Check out these top equipment financing lenders >>
Final Thoughts
The good news for borrowers is that there are a variety of options out there. For those with poor credit, or for whom time is of the essence, a merchant cash advance is one way to get money quickly. This option can be expensive, however, and may compound cash flow problems if you can’t keep up a steady amount of credit card transactions.
Written by: Brian T. O'Connor
Brian is a small business writer, focusing on the best ways for entrepreneurs to get their business off the ground. Brian is the co-owner of Brunch Money, a digital strategy agency based in Connecticut.
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Reviewed by: Sarah Brooks
Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.
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Fact Checked by: Dr. JeFreda R. Brown
Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal to help others develop and maintain financial wellness.
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