Nov 3 • General discussion
The Dark Side of Merchant Cash Advances
Everybody loves to talk about how fast MCAs fund. 💸
Nobody talks about how fast they choke you out.
Let’s keep it real for a second.
MCAs are revenue-based funding, they buy your future receivables.
That’s why they don’t care about your credit, tax returns, or collateral.
All they care about is your daily deposits.
That’s why it’s usually small businesses that get them
⭐grocery stores
⭐restaurants
⭐mechanics
anyone making sales every single day.
They’ll ask for 3–4 months of statements, look at your volume,
then give you a chunk of cash with a factor rate — usually around 1.50
Sounds cool until you do the math.
That’s not 50% interest… that’s an APR that can hit 80–150% depending on the term. 🤬
And here’s the real problem:
They take their cut daily or weekly... right out of your deposits.
So even if you’re making money,
you’re bleeding cashflow.
Every day you’re open, you’re paying them back before you pay yourself.
That’s why I call MCAs a bandaid with teeth. ☠️
They help you breathe for a minute, then they start to squeeze.
If you need money to sit on and then deploy later...
this is not your move.
It’ll choke your liquidity before you can even use it.
Even businesses that make sales daily end up defaulting.
Not because they’re bad operators,
but because the repayment structure crushes them.
So yeah, it’s fast money…
but fast money always has a catch.
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The Dark Side of Merchant Cash Advances
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