Key Takeaways
- MCAs deduct repayment from daily credit card settlements — no green card required
- MCAs are expensive (factor rates 1.2-1.5x) and fast (1-3 days)
- Bankable's revenue-based funding is structured like an MCA but draws from all deposits
- MCAs are best for high-volume card-processing businesses (restaurants, retail)
- Understand total cost before signing any MCA agreement
A merchant cash advance (MCA) is one of the oldest and most accessible forms of alternative business financing — and it has no immigration status requirement. MCAs have been funding asylee-owned restaurants, retail stores, and service businesses for years, often before the business owner knew other options existed. Understanding how MCAs work — and when they are and aren't the right choice — is important for every asylee entrepreneur.
How a Merchant Cash Advance Works
An MCA provider advances you a lump sum against your future credit card sales. Repayment is automatic: every day, a fixed percentage (called the "holdback" or "retrieval rate") of your credit card settlements is sent to the MCA provider until the advance plus the factor amount is repaid. Typical holdback rates: 10-20% of daily card sales.
Example: You receive $50,000 MCA with a factor rate of 1.3 (you repay $65,000 total). Your daily card volume is $5,000. The holdback rate is 15%, so $750/day goes to repayment. At $750/day, you repay $65,000 in approximately 87 days.
MCA vs. Bankable Revenue-Based Funding
Bankable's revenue-based funding works similarly to an MCA but with one key difference: repayment comes from total bank deposits, not just credit card settlements. This matters for businesses that receive significant revenue by check, ACH, or cash. Bankable is also typically more structured in terms of term clarity and customer communication.
When MCAs Make Sense
MCAs are appropriate when you need capital very fast (1-3 days), your business processes high daily credit card volume, and the business opportunity justifies the cost. A restaurant that needs $30,000 for an emergency equipment repair and processes $8,000/day in card sales is a good MCA candidate. Apply to Bankable first — we are a more structured and often lower-cost option for businesses that qualify under our criteria.
Frequently Asked Questions
Yes. MCAs typically have no immigration status requirement. They are based on your daily credit card processing volume. EAD is not usually required, though some MCA providers may ask for it.
MCAs are the fastest funding option available — approval and funding can happen within 1-3 business days.
MCAs and Bankable use similar factor rate structures. Rates vary by provider. Compare factor rates and total repayment amounts before signing.
The holdback rate is the percentage of your daily credit card settlements that goes to MCA repayment. Typical rates are 10-20%. Higher holdback means faster repayment but tighter daily cash flow.
Bankable provides revenue-based funding that is similar in structure to an MCA but draws from total bank deposits rather than just credit card settlements. This is more flexible for businesses with diverse payment types.
MCAs can create cash flow strain if the holdback rate is too high relative to your margins. Stack MCA (multiple MCAs from different providers simultaneously) dramatically increases risk. Read all contracts carefully.
Technically yes, but stacking MCAs is dangerous and often prohibited by MCA contracts. It can lead to total repayment obligations exceeding your revenue.
If you need capital within 1-3 days and don't qualify for Bankable's 48-hour process, an MCA may be appropriate. Calculate the total cost (factor rate x advance) and ensure your margins support the repayment.