What is a Merchant Cash Advance?
 

When a small business owner takes out a merchant cash advance (MCA), they’re given a lump sum of cash, which they repay via a percentage of their daily credit and debit card sales. Less commonly, you can get a MCA with terms that include a fixed daily payment based on an estimate of your monthly revenue. Merchant cash advance companies typically partner with credit card processors.

​

Methods for Paying Back a Merchant Cash Advance

In some cases, the repayment can be handled by your credit card processor, which deducts the owed funds automatically from your credit card sales and transfers the agreed-upon daily sales percentage to the MCA company.
 
In the case of a lock box or trust account withholding, credit card sales go to a bank account controlled by the MCA company. The MCA company then takes its share of the money and transfers the rest to the business’s bank account.
 
With ACH withholding, the repayment is made via automatic debit from the business’s checking account to the MCA company.