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What is MCA Percent Of Monthly Revenues?

MCA lenders look at percent of monthly revenue to decide if your business can afford a cash advance, and for how much.

Apply below for programs that offer the highest cash advance percentage of monthly revenue. This means the largest approval amounts because the highest percent of your business revenue is allowed for an mca.

MCA Percent of Monthly Revenue

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Programs above offer the maximum approvals for mca’s as a percentage of your monthly business revenues.

  1. How it Affects Your MCA.
  2. Why it is Critical.
  3. How it is Calculated.
  4. Should You Care?
What is an mca percent of monthly revenue?

1. How it affects your MCA:

The percent of monthly revenues that an mca merchant cash advance can be is what drives the amount of the advance offer much more compared to other qualifiers.

It also tells you the maximum amount in advance that a specific lender allows for bank statement loans.    Businesses that have an existing mca with a balance will therefore know how much more that lender can offer them.

Example:

An existing advance has a daily payment of $100 per day.   The cash advance company you apply with allows businesses to have a maximum 30% of their monthly gross business revenue in cash advance payments.

Further, your business has monthly revenues of $25,000.   So the total amount the lender allows your business in advance payments  is $25,000 X .25 = $7,500 per month in payments.   $7,500 per month % 21 days = $357 day.
An approval for 9 months should therefore render a maximum $48,000 offer by that lender.

While telling the mca company about advances with a few payments left seems like a risky thing to do, they will probably not include existing advance in their calculations.

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2. How it is calculated.

Example # 1:

Your business has average monthly deposits in the last 3 months of $50,000 per month.    The lender you apply with allows the total monthly amount
you pay on MCA advances to be a maximum of 25% of your monthly revenues.

As a result, they calculate the maximum approval as follows:
$50,000 x .25 = $12,500 per month and there are 21 daily payments or
4 weekly payments per month.   So using daily payments, $12,500 % 21  = $591 / daily payment at 5 business days per week.

Another critical step in the offer amount will be how long that lender will make an offer for.   Longer terms result in higher offers, so a lender that offers a 9 month term can issue an approval of approximately $80,000.

This is because the math calculated to arrive at this approval amount is as follows:
$591 x 21 = $12,411 x 9 = $111,699, so a rate factor of 1.4 means that
$111,600 % 1.4 = $79,785.

3. Should you care? 

You should care because it allows you to do 2  important things:

1. Calculate what percent of your monthly business revenue any mca will be before you apply.    Also calculate whether you can afford the mca based the percent of monthly sales it totals.  You will also better understand what your affordability limits are for this transaction and for all future borrowing.

2.  Ask the lender before applying what the maximum is they allow.   You may exceed the maximum and therefore do not need to apply.    Also, the maximum amount they will approve you for may be too low.    This will save you time,  credit inquiries, and direct you to the best small business loan options.

FAQ on mca percent of monthly revenue for an advance.

What does percent of monthly revenue for an mca mean? 

It means the maximum percent of your monthly business revenue
that can be allowed for a cash advance.    Most lenders cap it between
20% and 30% of your monthly business revenue.

How do I know what my maximum approval will be for?

Take the average of your last 3 months total deposits.  Multiply it times .25.  This is the maximum amount per month many lenders  allow you to pay for a cash advance.

What if I already have an advance ?

Calculate the maximum your business can afford per month.   Deduct the monthly amount you already pay from that figure.   That is the difference you can still afford on a new cash advance with many programs.

Conclusion

Calculating the percent of monthly revenues an mca will be as a percentage of your monthly business cash flow helps you make several important decisions.

You know in advance if you are applying with a lender that can help and approve you for the entire amount needed.   You can ask lenders before you apply what their maximum percentage is and go to another lender if it is not high enough.

Another benefit is it helps you get the highest offers and saves maximum time by applying with the right funders.

For these reasons, know the maximum percentage of your business’s gross monthly revenue  lenders generally will allow in mca cash advances.   Also check back here on how to calculate approval and offer amounts needed to qualify for using the lenders maximum percentages allowed.

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Weekly and monthly payment business loans


Weekly and monthly payment business loans are now easier to qualify for with more choices and approvals. Fast and easy same day or next day funding on mca merchant cash advances.  Businesses are approved mostly on total deposits each month and the average daily balance in their account.   They can consolidate their short term advances and repay weekly or monthly. Apply Below Now!

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Frequently asked questions – FAQ: Weekly and monthly payment business loans:

Do I qualify?

Sales over $4,000 per month, 3 months time in business, and credit scores over 600 may qualify. Higher average bank balances and limited overdrafts and nfs also help. The higher any of these are, the more they can qualify for.

What are the terms and rates?

Rates start at upper single digits and higher. The stronger the customer profile, the lower the rates. More challenging profiles can qualify with higher rates.

How much can we get?

Amounts depend on your annual sales, time in business, credit and more. In general, approvals are a 35% to 100% ratio of annual sales. Annual sales of $250,000 may qualify for $25,000 to $100,000. Amounts may be higher or lower depending on other factors.

How fast can we close?

Closing can the same day or next day. Larger amounts for lower rate programs can take longer.

What credit or collateral do we need?

Credit scores 600 and above for weekly and monthly payments. Higher credit scores bring higher approval amounts and lower terms. Scores below 600 may still qualify depending on the cash flow and overall customer profile.

Do you loan to my type of business?

Programs are available for all industries. State and industry restrictions may apply to some plans. List the industry type when applying, or call before to discuss.


In the past, only a daily repayment option was available. A Merchant’s cash flow was under pressure to meet that daily payment.

Because of that daily stress, customers have been calling in and specifically requesting weekly and monthly approvals.

They also ask for consolidation of their short term loans.   Most requests are to consolidate merchant cash advances into one longer term business loan.

Recent Case Request

A Timber company in the Southeast wanted a Weekly or Monthly payment for working capital.   They were denied.  The reason?
In addition to their credit score being too low, they already had 3 current advances.

If a business already has 2 or 3 Advances,  it will be hard for them to get any additional financing that has a Monthly or Weekly payment.

It is considered too risky by underwriting.  Daily debits have a very high monthly total the customer has to repay.   Monthly payments behind 2 daily are never approved.

The most common requests are cash flow emergencies or to payoff short term advances.   Merchants often say they cannot handle the advances anymore and must get a longer term.  They cannot get out of their daily contracts on their own and need help.

Get a weekly or monthly business loan payment

Payment Examples

If a merchant was approved for a $50,000 advance with a 12 month repay at a 1.33 rate factor, the daily repayment would be $263 per day.

With a monthly or weekly merchant advance,  the repayment is as follows below:

$1,385 Weekly repayment

$5,541 Monthly repayment 

Merchants still have to be able to handle the total debt repayment.  Once qualified for weekly or monthly payments,  they don’t have to worry each day about making the next day’s payment.

This lowers the pressure.   It also eliminates the chance each day of a rejected payment and NSF insufficient funds.  Merchants won’t get way behind in only a few days.

Qualification Requirements

To qualify for the weekly and monthly repayment options, a longer time in business and more consistent cash flow is required.

Seasonal companies that have inconsistent cash flow and open for less than 1 year may only qualify for the daily or weekly program.   For those merchants, the once per day debit lowers the difficulty of making a large payment at the end of each week or month.

Many companies have good overall monthly cash flow, but low cash flow days during the month. A monthly payment allows them to meet their repayment terms.

Different MCA repayment terms

 Weekly or monthly ACH repayment option are easily calculated.

Example:  A business is approved for a $100,000 “short term advance” for 12 months.   The rate factor is 1.27.   The daily repayment is $504 (127,000 % 252).   The weekly and monthly repayment is calculated below.

Weekly repayment is $504 X 5.25 = $2,646.   The monthly repayment is $2,646 X 4 = $10,584.   The total repayment is $10,584 x 12 = $127,008.

Customers can look at the daily, weekly and monthly repayment terms to determine which one will work best for them.  Merchants call in frequently asking only for a monthly option.

Get approved and pick the best program from those.

Other sources of information include the SBA small business administration