Live market data
Pulled from official U.S. government APIs. Click a card to view the source.
TL;DR
A merchant cash advance funds in 24 hours, approves down to a 500 FICO, and is repaid as a percentage of daily deposits — but costs 30–80% APR-equivalent. A term loan funds in 2–7 days, requires a 600+ FICO, and runs 8.99–24% APR with fixed weekly payments. Choose an MCA for emergency speed under 30 days; choose a term loan for planned, multi-month investments.
How they're structured (and why it matters)
A merchant cash advance is technically not a loan — it's a sale of future receivables. You receive a lump sum and repay a fixed total (the factor amount) through a percentage of your daily or weekly deposits. There's no APR; instead you have a factor rate (typically 1.15 to 1.49). Because it is structured as a purchase of receivables rather than a loan, MCAs are generally treated differently from loans under state and provincial lending rules. Treatment varies by jurisdiction and continues to be tested by regulators and courts, so review any agreement with your own legal or accounting advisor.
A business term loan is a true loan — fixed weekly payment, fixed APR, fixed end date. APRs at Simply Approved Business Loans start at 8.99% for qualified borrowers. Term loans report to business credit and amortize like a mortgage, which means the longer you carry it, the more of each payment goes to principal.
Speed comparison
- •MCA: 24 hours from clean file to funded
- •Term loan: 2 to 7 days for most approvals; SBA up to 60 days
- •Decision turnaround: MCA pre-approval in 4 hours, term loan in 1–2 business days
Cost comparison (real numbers)
On a $100,000 advance with a 1.30 factor over 6 months, total payback is $130,000 — equivalent to roughly 60% APR. On a $100,000 term loan at 14% APR over 36 months, total interest is roughly $23,000.
Always convert offers to cents-on-the-dollar (total cost ÷ principal) before comparing. See our [factor rate guide](/guides/how-to-read-a-loan-factor-rate) for the math.
Qualification thresholds
- •MCA: 500+ FICO, $35K+ monthly revenue, 6+ months in business
- •Term Loan: 600+ FICO, $40K+ monthly revenue, 12+ months in business
- •Both require: business bank account at a bank or credit union, no open bankruptcy
Pros of an MCA
- •Fastest funding in the market — 24 hours
- •Approves credit scores down to 500
- •Payments flex with revenue (slow week = smaller pull)
- •No collateral required
- •Available to businesses as young as 6 months
Cons of an MCA
- •Highest cost product on the market (30–80% APR equivalent)
- •Daily or weekly remittance can pressure cash flow
- •Doesn't build business credit (it's not technically a loan)
- •Stacking multiple MCAs is dangerous and lender-prohibited
Pros of a term loan
- •Lowest cost outside SBA (8.99–24% APR)
- •Predictable fixed weekly payment
- •Builds business credit history
- •Longer terms (1–10 years) reduce monthly burden
- •Interest is fully tax-deductible
Cons of a term loan
- •Slower to fund (2–7 days)
- •Stricter qualification (600+ FICO, 12+ months)
- •Personal guarantee almost always required
- •Prepayment may include a small early-payoff fee
Common mistakes borrowers make
- •Comparing factor rate to APR directly — they aren't the same unit
- •Stacking MCAs to fix MCA cash-flow strain (it gets worse, not better)
- •Taking an MCA for a multi-year investment (you pay the speed premium for nothing)
- •Ignoring the daily debit hold — it can collide with payroll cycles
Run the numbers
MCA / Factor Rate Calculator
Convert a factor rate offer to total cost, daily remit, and approximate APR. Useful for comparing MCA offers against term loan APRs.
Methodology
Total payback = principal × factor. APR-equivalent ≈ (factor − 1) × (365 / term days). This is an approximation — true APR is slightly higher because daily remittances reduce balance over time. APR is defined per the federal Truth in Lending Act (12 CFR § 1026, Regulation Z). MCAs are typically structured as a purchase of receivables and not subject to TILA APR disclosure, but several states (CA SB 1235, NY S5470) require commercial financing disclosures with an APR-equivalent.
Business Term Loan Calculator
Standard amortization: fixed APR, fixed weekly payment. Same formula banks and SBA lenders use.
Methodology
Standard amortization formula: P × r / (1 − (1 + r)−n), where r is the monthly rate (APR / 12) and n is the term in months. APR is the annual percentage rate as defined in the federal Truth in Lending Act (12 CFR § 1026.22). Actual lender quotes may include origination fees that increase APR.
Compare Two Offers (APR-equivalent)
Paste any two offers — MCA, term loan, line of credit — and normalize them to the same yardstick.
Lowest APR-equivalent wins on cost. Cents-on-the-dollar (CoD) shows total cost per dollar borrowed regardless of term length.
Related questions
Yes, but lenders cap your total exposure relative to revenue. We help you stack thoughtfully so monthly debt service stays within 12–15% of deposits.
Related guides
How to Read a Loan Factor Rate (and Convert to APR)
Factor rates look smaller than APR but cost more. Here's how to read them and convert to a comparable annual cost.
Business Loan Rates Explained (1970)
APR, factor rate, and total cost of capital — what the numbers actually mean and how to compare offers across products.
Bank vs Alternative Lender: Which Should You Choose?
Banks are cheaper but slower and stricter. Alternative lenders are faster but pricier. Here's how to choose based on use case, time horizon, and qualification.
Sources & references
- Bank Prime Loan Rate (DPRIME)— FRED · Federal Reserve Bank of St. Louis
- Federal Funds Effective Rate (DFF)— FRED · Federal Reserve Bank of St. Louis
- Daily Treasury Par Yield Curve Rates— U.S. Department of the Treasury
- Commercial & Industrial Loans, All Commercial Banks (BUSLOANS)— FRED · Federal Reserve
- Small Business Credit Survey— Federal Reserve Banks
- Truth in Lending Act, Regulation Z (12 CFR § 1026)— Consumer Financial Protection Bureau
- California Commercial Financing Disclosure (SB 1235)— California Department of Financial Protection and Innovation
- New York Commercial Finance Disclosure Law— NY Department of Financial Services