Merchants Capital Access Review

Note: Merchants Capital Access has been purchased by Reliant Funding and is no longer in operation. Take a look at our filterable business loan reviews to learn about other funding options that might work for your small business.

Highlights

• Merchant cash advances
• Daily repayments
• Poor credit okay
• 24-hour funding decisions

Merchants Capital Access Overview

Merchants Capital Access (MCA) is a New York-based small business funder. It’s part of a growing industry that provides merchant cash advances rather than traditional lending products like bank loans. While these superficially resemble loans, they differ from them in some important ways, which we’ll discuss below.

MCA is a fairly typical specimen when it comes to online funders in both the positive and negative sense. You can probably find a better deal than what’s on offer here, but there also aren’t any unusual red flags I’d attach to the company.

Note: You should approach the world of alternative funding with caution; the rates are often usurious and the terms can be punishing for the unprepared or unlucky. You should always make sure you’ve exhausted other potential sources of funding first (take a look at our handy short-term funding comparison chart to make sure).

Services Offered

Merchants Capital Access offers the following types of business funding:

• Merchant cash advances

Borrower Qualifications

MCA is pretty non-committal about customer qualifications, instead boasting that they approve over 80 percent of applicants and will try to find “creative” ways to get you capital. Typically, you can expect advance providers to want you have been in business for at least months. Your minimum revenue will most likely depend on the amount of money you’re looking to have advanced:

Terms and Fees

Here’s what you can expect from MCA:

MCA is a fairly typically online funder. They deal exclusively in advances, though you should note that the term “merchant cash advance” has expanded to include some loan-like financial products. How free-wheeling a company can be with the definition varies from state-to-state. From the customer’s perspective, these restrictions can determine whether you’re repaying via an automated daily debit from a business account or having a percentage of your daily credit sales held back.

You might be wondering what those decimals adjacent to the “Flat Fee” headline mean. Often referred to as factor rates, these numbers represent multipliers that are applied to the sum your receive. So if you borrow $10,000, you’ll owe between $13,000 ($10,000 x 1.3) and $15,000 ($10,000 x 1.5), plus any fees charged for the service.

This system, while a lot simpler than the interest formulas used by banks, tends to hide just how much you’re being charged for the money. To make a comparison with traditional loans, you need to convert the flat fee structure to an APR. Because all your costs are front-loaded into the flat fee, a shorter term length means a higher effective APR. Be aware, however, that longer term lengths usually mean higher factor rates.

Application Process

One of the biggest selling points for online funders is that their qualification processes are streamlined. MCA, for example, boasts of 24-hour funding decisions. Keep in mind that that’s a best case scenario, but usually you’ll be able to get funding within a few days.

You can begin the process online, but you’ll want to have some documents handy for when a MCA representative contacts you. These documents may include three months worth of credit card and checking account statements, a photo ID, and a voided business check.

Sales and Advertising Transparency

As you may have suspected, online funders haven’t developed a reputation as straight shooters. For what it’s worth, MCA falls somewhere in the middle of the pack. The website doesn’t go out of its way to imply the company offers something that it doesn’t–MCA is explicit about offering cash advances, for example. They do lose a few points for trying to imply that month payments are a burden compared to the automated daily repayments of short-term funding.

What’s kind of unusual about MCA is how vague it is about qualifications. This is ostensibly to get people to apply, but more information would be helpful to prospective clients.

Customer Service and Technical Support

Most customers who cared to comment on the matter spoke well of MCA’s customer service. I found it slightly difficult to reach a human being there, but my experience may not have been typical.

Negative Reviews and Complaints

MCA rates A+ on BBB and, surprisingly, only has positive reviews there as of this review’s publication. For whatever reason, there are fairly few user reviews on the web outside of customer testimonials. General criticisms of this type of product include:

• Price: Short-term lending relies on extremely high-interest rates to make money. Even the best players in the business are pretty expensive.
• Daily payments: While the company takes pains to cast them in a positive light, they’re staking a claim on a portion of the revenue you earn every day. If you don’t plan carefully, you might be in a for a nasty surprise.
• Lack of transparency: I discussed this in greater detail above.

Positive Reviews and Testimonials

Here are some reasons to consider MCA:

• Fast: If there’s one area in which online funders like MCA live up to their advertising, it’s in terms of speed.
• Been around for awhile: While many of its competitors are only a few years old, MCA has been in business since 2009.
• Customer service: Customers generally seem satisfied with the care they received from MCA staff.

Final Verdict

Online funding for small businesses is a new golden goose for the finance industry. And like all frontiers, it comes with both risks and opportunities. Make no mistakes, most of the funders are, to varying degrees, predatory. The question is whether your business needs the money badly (and quickly) enough to pay the price. Merchant Capital Access falls somewhere in the middle of the pack, with average rates, average transparency, and above par speed. You won’t be putting yourself at inordinate risk borrowing from them, but there are probably better options.

If you’re not sure where else to look, our alternative suggestions page might help point you in the right direction.

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