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Merchant Cash Advance

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Merchant cash advances are best for filling short term needs when you have difficulty qualifying for other options. With a merchant cash advance (MCA), you get a lump sum in return for selling a sale of your future sales that you pay back with a percentage of your sales until the advance is repaid.

Merchant cash advance lenders typically base approval and terms on your sales history more than on your credit rating or other factors. Because repayment amounts fluctuate with your daily sales, an MCA can have a gentler impact on cash flow than a term loan can. But fees may be high, and a lack of robust regulation means it's especially important to take the time to understand all of the terms.

Payment gateway lending. A payment gateway is a company, such as Hybrid Funder, which processes credit and debit card transactions, that may offer access to small business financing options for businesses that regularly use its services. A payment gateway assesses risk primarily by using what it already knows about your business and sales patterns, instead of obtaining a business or personal credit score. Most payment gateway loans are issued by a non-affiliate bank and share many characteristics with merchant cash advances, but can offer more favorable terms. You typically get a lump sum for a fixed fee, and agree to use a percentage of your sales to repay the combined amount.