A merchant cash advance is a business financing product where a funding company advances a lump sum of capital in exchange for a fixed dollar amount of the business's future sales. Repayment is collected as a percentage (the "holdback rate") of daily credit card or bank receipts — automatically, without the borrower writing a check. An MCA is technically a purchase of future receivables, not a loan, which means it's faster to obtain and less regulated than traditional business loans. Advances typically range from 1x to 2x monthly business revenue, with factor rates of 1.15 to 1.50.

A factor rate is the pricing mechanism used for MCAs and revenue-based financing. It's a simple multiplier applied to the advance amount to determine your total repayment. Example: $75,000 advance × 1.35 factor = $101,250 total repayment. Unlike a traditional interest rate that accrues over time on outstanding principal, a factor rate is fixed at origination — you always know your total cost. The key difference from interest: paying early does not reduce your total repayment with a factor rate. Factor rates range from 1.15 (good risk) to 1.50 or higher (higher risk). Always ask for the factor rate, not just "how much do I pay back."

Most MCA funding companies advance between 50% and 200% of your average monthly gross revenue. A business doing $80,000/month could typically access between $40,000 and $160,000. The exact amount depends on the consistency of your revenue, the stability of your deposits, your current outstanding advances (if any), and your general financial profile. Stacking multiple MCAs (taking a new one while an old one is still outstanding) significantly limits what you can access and should be avoided whenever possible.

Revenue-based financing is the most accessible form of business capital available. Many MCA lenders will work with credit scores as low as 500 to 520, as long as your business is generating consistent daily revenue (typically $10,000+ per month) and has been operational for at least 6 months. Credit score is a very minor factor in most MCA approvals — the primary focus is your bank statement activity and the consistency of your deposits. This makes it one of the few viable options for businesses with poor personal credit.

Merchant cash advances are the fastest form of business financing available. Many of our lending partners can get you from application to funded bank account in 24 to 48 hours. The application requires just 3 months of business bank statements, a signed application, and basic business information. No tax returns, no collateral, no lengthy credit analysis. If you need money by tomorrow, an MCA is often the only product that can deliver it.

This depends entirely on your situation. If you have time (30+ days), good credit (650+), and 2+ years in business, an SBA loan or term loan will be significantly cheaper. If you need money within 48 hours, have lower credit, are in a high-revenue but cash-flow-volatile industry, or need repayment flexibility during slow periods — an MCA or revenue-based advance may be the right tool despite the higher cost. At Hawk Funding Group, we always show you the full picture: the MCA option and the conventional option side by side, with honest cost comparisons, so you can make the best decision for your business.

Yes — but carefully. "Stacking" (taking a new MCA while an existing one is outstanding) is possible but significantly increases your daily repayment burden. It can quickly create a cash flow crunch that's hard to escape. Some lenders will not advance if you have more than one or two outstanding positions. Our team will review your current obligations before recommending any new funding, and we'll be completely transparent about whether taking on additional capital makes financial sense for your business right now.

We believe in transparency, so here's the honest truth: revenue-based financing is the most expensive form of business capital when measured by effective APR. A 1.30 factor rate over 8 months works out to a very high effective annualized cost. That's the tradeoff for the speed, flexibility, and accessibility it provides. It makes sense when: you need capital immediately and can't qualify for or wait for conventional financing; the ROI on what you're funding clearly exceeds the cost; or it's a bridge to better financing. It doesn't make sense when: you have time and can qualify for an SBA loan or term loan. Hawk Funding Group will always show you all available options so you can choose the most cost-effective path. Talk to an advisor →

Total Repayment = Advance Amount × Factor Rate

Example: $50,000 advance × 1.30 factor rate = $65,000 total repayment. The holdback (daily collection) rate might be 10% of gross sales. At $2,000/day in sales, you'd repay $200/day and retire the advance in about 325 business days. At $3,000/day, you'd be done in about 217 days. The faster your sales, the sooner you're done. Factor rates typically range from 1.15 to 1.50 depending on risk profile.

Unlike interest rates, factor rates are fixed at origination. You know your total repayment amount from day one.