A Merchant Cash Advance (MCA) is one of the most misunderstood business financing products available. As a direct MCA lender, Solvic Capital explains exactly how it works.
How a Merchant Cash Advance Works
An MCA is technically a purchase of future receivables, not a loan. You receive a lump sum of capital upfront. In return, the lender (Solvic Capital) purchases a percentage of your future daily card sales or business revenue. Repayment happens automatically each business day until the total obligation is satisfied.
Understanding Factor Rates
MCAs use factor rates instead of interest rates. A factor rate is a simple multiplier applied to your advance amount. If you receive $50,000 at a 1.30 factor rate, your total repayment is $65,000 ($50,000 x 1.30). The $15,000 difference is the cost of the advance.
Why Get an MCA Directly?
When you get an MCA through a broker, the broker adds their commission to your factor rate. Applying directly with Solvic Capital means you receive our direct factor rate — no markup, no broker fee.
When Does an MCA Make Sense?
MCAs work best for businesses with strong daily card sales, urgent capital needs, or businesses that have been declined by traditional lenders. Same-day funding makes MCAs particularly useful for emergencies.