Key Takeaways
- MCAs provide fast capital but carry factor rates of 1.2-1.5 (20-50% cost)
- T visa holders qualify for MCAs based on daily card sales volume
- MCAs are repaid as a percentage of daily card transactions automatically
- Use MCAs only for short-term emergencies — not long-term capital needs
- Bankable's revenue-based financing offers similar speed at better terms
A Merchant Cash Advance (MCA) is one of the most accessible — and most misunderstood — forms of business capital available to T visa entrepreneurs. This guide explains exactly how MCAs work, what they cost, when they make sense, and when you should choose an alternative.
How an MCA Works
An MCA provider gives you a lump-sum advance in exchange for purchasing a portion of your future credit card and debit card sales. Instead of a fixed monthly payment, a set percentage (typically 10-20%) of each day's card transactions is automatically deducted and sent to the MCA provider until the advance is repaid. For T visa entrepreneurs with high daily card volume, this is genuinely accessible capital.
MCA Cost: Understanding Factor Rates
MCAs do not use interest rates — they use factor rates. A factor rate of 1.35 on a $50,000 advance means you repay $67,500 total (50,000 × 1.35). The cost of that $17,500 premium depends on how quickly you repay:
- Repay in 3 months: annualized cost ~140%
- Repay in 6 months: annualized cost ~70%
- Repay in 12 months: annualized cost ~35%
MCAs are expensive. They make sense only when the cost of not having the capital exceeds the cost of the MCA.
When an MCA is the Right Tool
- True emergency where the alternative is losing the business
- Opportunity with a clear, fast ROI (bulk inventory purchase, a catering contract)
- You have strong daily card volume and can repay within 3-6 months
- Every other option has been declined or is too slow
Better Alternatives to MCAs
Bankable's revenue-based financing offers similar speed (5-10 days) at significantly better rates. Before accepting an MCA, check your Bankability Score — you may qualify for better terms. Also explore business lines of credit for ongoing flexibility without MCA costs.
Frequently Asked Questions
Yes. MCAs are among the most accessible capital products for T visa holders — approval is based entirely on your daily card sales volume. No immigration status check, no credit score minimum, and no collateral required.
An MCA is technically a purchase of future receivables, not a loan. There are no monthly payments — instead, a daily percentage of card transactions is automatically withheld. This means no fixed payment schedule and no late payment penalties, but the total cost is typically higher than a loan.
Factor rates below 1.25 are reasonable for a 6-month advance. Factor rates above 1.4 should only be considered in true emergencies. Always calculate the annualized cost before accepting any MCA offer.
MCAs fund in 24-72 hours for businesses with strong card processing history. This is the primary reason businesses choose MCAs — the speed is unmatched by most other funding products.
Most MCAs take 10-20% of daily card sales as repayment. Slower months mean slower repayment; busy months mean faster repayment. This flexibility is one of the MCA's advantages over fixed payment loans.
No. Stacking multiple MCAs simultaneously is a high-risk strategy that often leads to cash flow crisis. If each MCA is taking 15-20% of your daily sales, stacking two or three means 30-60% of daily revenue is consumed by repayment, leaving little for operations.
Contact the MCA provider immediately. Many will negotiate a temporary reduction in the daily withholding percentage during slow periods. Unlike a loan, there is no fixed default date — repayment simply takes longer when sales are lower.
For most T visa entrepreneurs, Bankable's revenue-based financing is the better choice — it's only slightly slower (5-10 days vs. 24-72 hours) but costs significantly less. Reserve MCAs for situations where you need capital within 24-48 hours and cannot wait for a standard application process.