Business Funding Guides

What Is a Factor Rate?

A factor rate is a decimal number — usually between 1.10 and 1.50 — that you multiply by the amount funded to get the total amount you'll repay. A $40,000 advance at a 1.25 factor rate costs $10,000, for a total payback of $50,000. Unlike interest, the cost doesn't decrease if you repay faster.

MCA vs Business Loan: What's the Difference?

The main difference is that a business loan is debt repaid with interest over a fixed term, while a merchant cash advance is a purchase of future sales repaid through a share of revenue. Loans are cheaper but harder to qualify for; MCAs are faster and more accessible but cost more.

How Does an MCA Holdback Work?

The holdback is the fixed percentage of your daily card sales or bank deposits that goes to the MCA provider until the full payback amount is collected. Typical holdbacks range from 8% to 20%. If you average $2,000 a day in sales with a 10% holdback, about $200 per day goes toward the advance.

What Is MCA Stacking?

MCA stacking is taking a new merchant cash advance while one or more are still being repaid. Each additional 'position' adds another daily or weekly debit, which can quickly consume a large share of revenue. Many agreements prohibit stacking, and it's a common path into a debt cycle.

How to Get Approved for Business Funding With Bad Credit

To get business funding with bad credit, focus on products that weigh revenue over credit — merchant cash advances, invoice factoring and equipment financing — and strengthen your file with clean bank statements, consistent deposits, few overdrafts and documentation ready to go.

What Documents Do I Need for Business Funding?

For most fast business funding you need 3–4 months of business bank statements, a government-issued ID, a voided business check and basic business information (EIN, address, ownership). Term and SBA loans add tax returns, financial statements, a debt schedule and sometimes a business plan.

How Fast Can I Get Business Funding?

The fastest business funding — merchant cash advances and some online short-term loans — can arrive within 24 to 72 hours, occasionally the same day. Online term loans and lines of credit typically take 1–7 days, while bank and SBA loans usually take 30–90 days.

SBA 7(a) vs 504: Which SBA Loan Is Right for You?

SBA 7(a) loans are flexible, general-purpose loans for working capital, equipment, refinancing and acquisitions. SBA 504 loans are specifically for major fixed assets like real estate and heavy equipment, and typically require about 10% down with long fixed-rate terms. Choose 504 for property; choose 7(a) for nearly everything else.

How to Consolidate Merchant Cash Advances

To consolidate merchant cash advances, list every open position with its remaining balance and payment, request payoff letters, then compare a refinance (term or SBA loan), a consolidation advance and reverse consolidation on both new periodic payment and total remaining cost. Choose the option that makes payments affordable without dramatically increasing total cost.

How to Read a Business Funding Offer

When reading a business funding offer, focus on six numbers: the amount funded, net amount after fees, total payback, payment amount and frequency, estimated term, and estimated APR. Then check fees, prepayment terms, renewal terms and whether the agreement includes reconciliation or a personal guarantee.