A merchant cash advance isn’t a loan. Instead, it’s an advance on your future credit or debit card sales in return for upfront funding. Repayment happens automatically through a fixed percentage of your daily card transactions until the total agreed-upon amount is paid back.

Yes, merchant cash advances are legal and commonly used by small businesses throughout the U.S. They’re treated as commercial agreements rather than loans and are regulated under contract law.

The cost of a merchant cash advance depends on things like your business health, revenue, and repayment terms. Instead of an interest rate, most MCAs use a simple factor rate. Don’t worry—your funding advisor will walk you through everything upfront so you’ll know exactly what you’re agreeing to before moving forward.

Some providers do give discounts or perks for paying off early, though it depends on the agreement. Even if a discount isn’t available, settling your MCA ahead of schedule can boost your chances of qualifying for future funding and shows a strong track record for your business.

There are no limits—your advance can go toward whatever your business needs most. From marketing and payroll to inventory, upgrades, expansion, equipment, or day-to-day expenses, it’s completely up to you.

Your credit score is looked at, but it’s not the main focus. MCA providers care more about your cash flow, daily card sales, and overall revenue, since those give a clearer picture of your business’s health.