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Understanding Merchant Cash Advances

A Merchant Cash Advance (MCA) is a financing option where a business receives a lump sum payment in exchange for a percentage of future credit card and debit card sales. The concept was developed by Barbara Johnson and her partners, leading to the establishment of AdvancMe, the first MCA company. MCAs are characterized by short payment terms and small daily payments, differing from traditional bank loans which have larger monthly payments and longer terms.

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29 views1 page

Understanding Merchant Cash Advances

A Merchant Cash Advance (MCA) is a financing option where a business receives a lump sum payment in exchange for a percentage of future credit card and debit card sales. The concept was developed by Barbara Johnson and her partners, leading to the establishment of AdvancMe, the first MCA company. MCAs are characterized by short payment terms and small daily payments, differing from traditional bank loans which have larger monthly payments and longer terms.

Uploaded by

chumtso1988
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A merchant cash advance (MCA) was originally structured as a lump

sum payment to a business in exchange for an agreed-upon percentage of


future credit card and/or debit card sales.[1] The idea originated from Barbara
Johnson, who needed funds for her small business franchise. As a result,
Barbara, her husband Gary, and Les Falke co-founded AdvancMe, the first MCA
company, which later became CAN Capital. The term Merchant Cash Advance
(MCA), first used by Les Falke to label AdvanceMe's product, is now commonly
used to describe a variety of small business financing options characterized by
purchasing future sales revenue in exchange for short payment terms (generally
under 24 months) and small regular payments (typically paid each business day)
as opposed to the larger monthly payments and longer payment terms
associated with traditional bank loans. The term "merchant cash advance" may
be used to describe purchases of future credit card sales receivables or short-
term business loans.[citation needed]

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