How The MCA Process Works


July 31, 2023

How The MCA Process Works

Need quick funding for your business?

No problem, this guide will walk you through the whole process from A to Z.

If you have everything prepared, via this guide then, you might get funded in 24 hours or less!

The beauty of cash advances, unlike traditional forms of lending, is that they can be used to obtain funds quickly and often with less qualifications (likely uncollateralized). 

Watch our brief video: we will go through the process step-by-step to secure a cash advance and fuel your growth.

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When loan applicants get denied for a bank loan what can they do?

Alternative Financing Maybe a Solution

A Merchant Cash Advance (MCA) is a form of alternative financing. A MCA is not a loan, but rather a cash advance based upon the credit or debit card sales deposited in a business' merchant account. When a business owner gets an MCA, they're essentially selling a portion of their future credit card sales (receivables) in exchange for immediate funds. The whole process of obtaining working capital can occur on the same day as you apply. That is why merchants have flocked to this type of working capital solution.

Before Applying

Grab some sticky notes, a notepad or copy and paste these points down so you are prepared and expectations are managed.

  • Evaluate Your Financial Needs: Assess the purpose and amount of the funds required for your business goals. 
  • Gather Relevant Financial Documents: Organize bank statements, tax returns, profit and loss statements and credit card processing statements.
  • Check Your Credit Score: Although a poor credit score will not disqualify you for working capital and you can still recieve offers and get funded the terms and cost of capital will be lower with a higher credit score. Review and address any errors or discrepancies that could affect your creditworthiness. Mnay people find there are incorrect items that show up and you can address them immediately.
  • Review the SLS Application Page: Make sure you’re ready to enter all the relevant information.
  • Check Eligibility Requirements: Review the eligibility requirements of working capital providers. 


Have these items handy.

  • Last 4 months of bank statements (some providers might require 6 months)
  • Tax ID
  • Social Security Number
  • Email
  • Invoices if you are looking to factor your receivables
  • Annual Revenue

After submitting the application, a funding specialist will reach out to you to discuss your needs and what exactly you might be qualified for. 

Your specialist will then submit to our premium network of lenders with the goal of obtaining approvals that closely match your business needs. 


If your company qualifies for funding, your dedicated agent or funding specialist will reach out to discuss offers that will reflect terms. 

Here are the typical terms and components included in working capital Merchant Cash Advance:

  1. Advance Amount: This is the approved amount of money the merchant receives upfront.

  2. Factor Rate: Also sometimes called the "buy rate", this determines the total amount the business owner will need to repay. It's a multiplier, often between 1.1 to 1.5. For example, if a business receives an advance of $10,000 with a factor rate of 1.2, they will owe $12,000.

  3. Retrieval Rate (or Holdback): This is the percentage of daily credit card sales that the MCA provider will take as repayment. For instance, if a business has a retrieval rate of 10%, and they process $5,000 in credit card transactions one day, the MCA provider would take $500 for that day.

  4. Estimated Repayment Duration: Based on the retrieval rate and the business's average credit card sales, an estimate can be made regarding how long it will take for the business to repay the advance in full.

  5. Early Payment Options: Some MCA agreements might have terms that allow businesses to repay the advance sooner, possibly at a discount.

  6. Origination or Processing Fees: Some MCA providers might charge a fee for processing the advance.

  7. Other Fees: This could include late fees, administrative fees, or other potential charges.

  8. Collateral: While MCAs are typically unsecured, meaning they don't require collateral, some agreements might include terms that require the business to put up assets as collateral.

  9. Default Terms: Conditions under which the merchant is considered in default, and what penalties or actions may be taken in such cases.

  10. Restrictions: Some MCA contracts might place restrictions on a business, such as not allowing them to switch credit card processors or to take on additional debt.

  11. Renewal Options: After a certain percentage of the MCA has been repaid, the merchant might have the option to renew or take out another advance.

It's worth noting that while MCAs can be a useful tool for businesses in need of quick cash, they can also come with high costs. Business owners should carefully review the terms and compare them with other financing options before making a decision.

What To Know After Receiving Terms But Prior to Getting Funded

  • If you decide to move forward after being approved you will need to provide your agent with a driver’s license, state or federal ID as well as a voided check for the funding account. 
  • Shortly after the funding company will schedule a funding call / bank authentication.
  • When the funding company has the information they need to finalize the deal the wire/transfer will be deposited into your bank account almost immediately (usually ~24 hours).

Knowing what to submit is half the battle, once you have everything prepared and submitted an agent will get you to the finish line.

Our team is here to assist you in the process to obtain the working capital you need to keep your business running.

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Please do not hesitate to reach out to us with any questions or concerns regarding your funding needs.

We are committed to supporting you through these challenging times and helping you achieve your business goals.

Disclaimer: The material presented in this publication is distributed solely for educational and general informational purposes. The views and opinions expressed herein may or may not necessarily reflect the official policy or position of Straight Line Source. This content should not be considered as a substitute for professional advice in legal, financial, or accounting matters. We strongly encourage individuals to seek the guidance of qualified professionals for specific advice tailored to their personal circumstances before taking any action based on this content.