Merchant cash advance

A merchant cash advance, or MCA, is short-term funding for businesses that accept debit and credit card payments. It is an alternative mode of financing to traditional loans. With an MCA, Phoenix provides businesses with an upfront advance, which a business then repays using a percentage of its card transaction sales, plus fees.

Unlike small business loans, companies can acquire an MCA without needing to offer up assets for security, such as property or inventory, to access funding

The Phoenix MCA repayment procedure is structured as follows:

  • Phoenix establishes a business’s factor rate – which is a tool in a decimal form that expresses interest rates for business financing – and then lends the company an upfront sum – the advance.

  • The sum is deducted daily, weekly, or monthly via a percentage of the company’s sales, plus interest, until the amount is repaid in full.

  • The amount repaid is determined by debit and credit card sales; however, a typical deduction can be around 10% of each card sale

Our repayment time scales for MCAs typically range from three to 12 months. Unlike other Phoenix loans, there are no repayment terms as they are subject to the company’s sales; the higher the number of debit or credit card purchases, the quicker the repayment.

The benefits in MCAs for Phoenix clients include:

  • Flexible payments: A business line of credit offers more flexibility than a secured loan and can be used for multiple purposes, such as purchasing inventory or covering payroll

  • Instant funding: Accessing a Phoenix MCA can be easier than applying for a small business loan and requires less documentation; funds can be distributed in as little as a few hours

  • Adaptable repayment plan: A credit line provides workable repayment terms to accommodate the growth of the business; for example, seasonal shifts reduce the monthly revenue, and the company only needs to pay the minimum amount due

  • Personal and business distinction: A credit line enables SME owners to streamline and monitor business expenses only, thereby keeping personal accounts separate