By the factor/multiple and any fees (origination, closing, wire/ACH, admin, NSF/late).

MCAs don’t price by APR, but you can model an implied APR based on expected payoff speed.

Risk profile, industry, revenue volatility, time in business, average monthly deposits/card volume, existing obligations, and competition among funders.

Often 0%–10% combined; confirm a full fee sheet and whether fees are net-funded.

Watch for lockbox/processor fees, monthly admin, reconciliation fees, wire charges, and default/NSF fees.

Usually no—the total cap is fixed. Faster remittance increases your realized APR; slower remittance lowers APR but extends duration.

Sometimes. Many MCAs require the full remaining cap; some offer limited prepay concessions—get it in writing.

No, but they change timing of pulls/processor splits and reconciliation cadence.

ACH: fixed dollar debits approximating the agreed holdback, with periodic true-ups.
Processor split: your card processor diverts the holdback % from card batches automatically.

Periodic adjustment so remittances equal the agreed holdback % of actual revenue. Critical for alignment in slow months.

Usually gross card sales (processor split) or gross deposits (ACH-based). Confirm exact definition and exclusions.

Contracts should define whether they reduce the revenue base and how adjustments are applied.

Most funders require bank/processor statements for monitoring and reconciliation.

Sometimes by mutual agreement or triggers. Some contracts allow temporary reductions for seasonality/hardship.

A controlled account through which sales flow; the funder takes its split before forwarding the remainder to you.

Funds withheld to cover chargebacks/returns/fees; more common with processor-linked structures.

Often unsecured but paired with a UCC-1 lien on receivables/fixtures. Some request specific collateral or personal guaranties.

Common, but not universal. Strength of file and contract form matter.

Taking multiple MCAs/positions simultaneously (1st/2nd/3rd position). Increases strain and risk; often restricted by contract.

Yes—via renewals, buyouts, or reverse consolidations. Compare blended cost carefully.

Commonly 3–6+ months; more favorable terms after 12+ months.

Often $120k–$300k+ annualized or $10k–$30k+/mo deposits, depending on funder and industry.

Wide range (e.g., 500–650+ FICO). Bank health and revenue consistency matter more.

Some industries restricted (e.g., adult, gambling, firearms, CBD/THC, etc.). Ask for the funder’s prohibited list.

Consistent deposits, few NSFs/negative days, stable average daily balance, and limited existing obligations.

Application, IDs, last 3–6 months bank and/or processor statements, voided check; sometimes tax returns/financials for larger deals.

Usually yes (soft/hard). Business credit and UCC search are common.

Possible for verification, especially for larger advances or perceived risk.

Simple files can be decisioned same day. Complex files take longer.

Often within 24–72 hours after final approval and contract signing.

ACH/wire to your business account; some net-fund fees at funding.

Often yes—factor, holdback, fees, reconciliation mechanics, PG scope, and UCC priority may be negotiable.

Typically yes. Confirm lien scope/priority and termination upon payoff.

Yes—ensure each revenue stream is captured or accounted for in reconciliation.

Payments rise with strong sales and fall with slow sales. Plan buffers for peak seasons and avoid over-committing % of revenue.

Request reconciliation or a temporary holdback reduction per contract. Provide statements quickly.

ACH-debit MCAs can use daily fixed pulls with periodic true-up to approximate a % of total deposits.

Processor splits follow batch timing; ACH debits skip bank holidays and resume next business day.

Formal “pauses” are rare; reconciliation/temporary reductions are more common where permitted.

Depends on margin and volatility; many fall in 8%–15%. Ensure it fits your operating and COGS structure.

New capital extended after a percentage of RTR is remitted (e.g., 50% paid). Often refinances the remaining balance.

Yes—new contract, new factor. Evaluate blended cost and cumulative revenue share.

A new funder pays off your current MCA (or multiple) and issues a fresh position. Verify payoff letters and UCC releases.

A structure that pays multiple funders while adding a new obligation. Scrutinize cost and feasibility carefully.

A clause allowing expedited judgment upon default in certain jurisdictions (restricted/banned in many places). Seek legal counsel.

Several U.S. states require cost-of-capital or standardized commercial financing disclosures. Ask for the summary.

Keep accounts in good standing, maintain processing through agreed channels, no additional senior liens/obligations without consent, provide statements, no fraud.

Material sales diversion, excessive NSFs, data disconnect, misrepresentation, unpaid taxes/levies freezing accounts, moving processors without notice.

Increase to default rates/fees, demand access to bank/processor info, legal action, enforce UCC/PG (if applicable), or seek COJ where legal.

MCAs exist across the U.S., but rules vary. Ensure your contract complies with local law and includes reconciliation language.

Loan = fixed payments and interest; MCA = variable remittances with a factor cap. Loans can be cheaper but less flexible in slow periods.

LOC = revolving with interest only on drawn amounts; lower cost if available. MCA funds quick when LOCs aren’t accessible.

RBF often uses broader revenue definitions and longer soft terms; both are revenue-linked with caps. Details vary by provider.

Factoring advances on specific invoices; MCA is portfolio-level on card/deposit sales with less AR ops overhead but potentially higher cost.

When you need speed, payments that flex with sales, and minimal underwriting.

Don’t switch processors/banks without consent; report new channels; keep statements transparent.

Ensure all revenue flows are captured for accurate holdback; use periodic reconciliation across channels.

Contracts should net them from gross sales or define adjustments at reconciliation.

Negotiate flexible reconciliation and realistic holdback; build off-season reserves.

Yes—many create an operating account to segregate MCA flows and improve cash planning.

Over-borrowing, stacking, opaque reconciliation, COJ exposure, cash squeezes during slumps, and aggressive fee structures.

No reconciliation clause, unilateral holdback increases, strict diversion language without cure period, heavy default fees, COJ without counsel, hidden fees.

Ensure projected holdback fits within gross margin and leaves room for fixed OPEX, COGS, taxes, and reserves.

Improve bank health (reduce NSFs, build balances), show stable deposits, consider smaller advance or alternative products.

Run bear/base/bull scenarios; stress test at 15%–20% revenue drop to confirm liquidity.

Read-only bank access, card processor portals, accounting exports. SOC-2/ISO controls vary by funder.

You may breach covenants; reconnect quickly or provide statements manually.

Monthly (sometimes weekly) to match pulls and reconcile holdback accurately.

Origination, broker, wire/ACH, lockbox/processor, monthly admin, late/NSF, UCC filing, and payoff letter fees.

Funded $100,000 at 1.35 factor ⇒ $135,000 total. Holdback 10%. If average monthly sales are $200k, you remit ~$20k/month; payoff ~6.75 months (actual varies).

Usually no—unless contract offers a stated early-pay discount.

Often restricted. Stacking strains cash flow and may trigger defaults.

Possible with intercreditor agreements. Senior lenders may object to junior liens or diversion.

Seek a buyout/consolidation with clear payoff letters and lien releases; ensure blended cost is acceptable.

Obtain a payoff letter and UCC-3 termination (and release of any PG obligations if applicable).

Yes—renewals can bring better factors/holdbacks and larger approvals.