4 Benefits of a Merchant Cash Advance for Small Businesses


A Merchant Cash Advance (MCA) is a type of business financing that benefits a Canadian small business owner in many ways. An MCA is designed by lenders to be widely accessible, seamless and convenient for Canadian small business owners. The biggest benefit of an MCA is that it works with the ebbs and flows of your business. The loan repayment method is on a daily basis, allowing you to make “bite-sized” payments, rather than large lump sums. It is easier to get approved for, since it isn’t solely based on your personal credit score, and bears a lower borrowing risk. It has an insignificant impact on your operating costs since a percentage of your daily plastic (debit/credit card) sales go towards the repayment of your outstanding amount. Lastly, the entire process of getting upfront capital, without upfront collateral can be completed in as little as 2 business days.

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Merchant Cash Advance (MCA) is one of the most beneficial types of business financing available to small business owners.

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1. Pay back in small amounts, ONLY when you get paid!

The merchant cash advance is on a daily repayment basis. Sounds scary? It’s not. The repayment is a small percentage of your daily sales that is deducted from your batch out. Since it is a percentage, on the days that you have low sales, you pay a low amount. Also, since the repayment method is on a daily repayment plan, the amounts are bound to be smaller than monthly payments.

Tip: Did you know that Thinking Capital rewards you for making lump sum payments in addition to your daily repayments? If you pay back the loan earlier than anticipated, you get a 10% discount off your borrowing price!

2. Doesn’t negatively affect your credit score

A merchant cash advance doesn’t show up on your personal and commercial credit report as a trade line credit. This is because a merchant cash advance is a cash transaction, not a credit-based loan. Also, it does not contribute towards your credit utilization. It can also be used to pay off your current credit loans to bring down your credit utilization, which increases your credit score.

3. Requires no upfront collateral – low-risk financing option

The merchant cash advance provides you with quick upfront capital, without the risks associated with it. There is no upfront collateral required, making it a safer option than collateral based loans. MCAs do not solely rely on your credit score for approvals, so bad personal credit score business owners can still be approved.

4. Easy application and quick financing

The application for a merchant cash advance with Thinking Capital is a quick and painless process. You can simply apply online for an MCA in under 10 minutes. To apply, you only need three pieces of documents:

  1. Business Bank Statements
  2. Void Cheque
  3. Government Issued ID

Once you have completed the application, expect a verification call within 30 minutes. If everything goes well, you can have your upfront capital in as little as 2 days. Yes, the entire process takes 2 business days.