MCA vs. Startup Funding: Compare Business Funding
MCA vs. startup funding — comparing fast revenue-based capital to purpose-built new business financing programs.
Merchant Cash Advance: A merchant cash advance delivers a lump-sum advance against your future credit card or daily revenue, repaid as a fixed percentage of daily sales. Startup Business Funding: Startup funding covers the earliest-stage capital needs — equipment, SBA microloans, and founder-backed lines of credit — for businesses with limited or no operating history.
Merchant Cash Advance vs. Startup Business Funding — side by side
| Merchant Cash Advance | Startup Business Funding | |
|---|---|---|
| Typical amount | $5,000 – $500,000 | $5,000 – $500,000 |
| Typical term | 3 – 18 months | 6 months – 10 years |
| Rate | 1.10 – 1.50 factor rate | 8% – 30% APR |
| Minimum time in business | 6 months | 0 – 12 months |
| Minimum credit score | 500+ | 600+ (personal credit weighted) |
Which is right for your business?
- Merchant Cash Advance tends to fit best when you need inventory purchases or payroll gaps.
- Startup Business Funding tends to fit best when you need initial equipment or inventory & supplies.
Frequently asked questions
Can a very new business get an MCA?
Most MCA funders require at least 6 months in business and consistent monthly revenue. Some funders accept 4–5 months with strong revenue. For businesses under 4 months old, startup funding programs are the primary option.
