Supplementary financial aid is vital for any small business seeking to grow and expand its operations. Maintaining sustainable working capital and cash flow makes it easier for a business to achieve its immediate and future objectives. Getting financial aid for your business is easier if you consider a bank loan or alternative financing options such as merchant cash advances. Here is a comparison between MCAs and bank loans.


Every borrower wants to access the funds needed for their venture faster. While you can benefit from bank loans and MCAs, their accessibility differs. Compared to a bank loan, MCA is easily accessible. The many requirements and contingencies make securing bank loans harder than other alternative financing avenues.

Repayment Terms

As you weigh between securing a business loan from a bank and MCA, understand that they differ in repayment terms. It is easy to manage repayments of MCA as the terms are contingent on future sales of your credit card. On the other hand, banks predetermine the repayments, and the terms depend on the amount borrowed and other factors.

The Amount Borrowed

Borrowing funds through MCAs depends on your credit card sales. If your business’s credit card has a higher sales value, getting more funds from the lender is possible. The case differs from a bank loan as you get funded depending on your business plan and requirements. You also need to provide more information on the funds’ utilization with bank loans, unlike MCAs.

Application Process and Approval

While banks are readily available, getting funds for your business can take longer than expected. A bank term loan application entails several things and information. Note that the lender looks at your credit history before determining your eligibility. With MCAs, the process is short, making it easy to achieve your objectives. You need a functional and profitable credit card to benefit from MCA.

Expenditure Restriction

With a bank loan, you get restricted on how much you can spend and for what purposes. You need a detailed business plan to convince the bank to fund your venture. With MCA, you use a credit card to secure funds but also to a limit. Unlike bank loans, MCAs don’t have expenditure restrictions despite limits. You can handle any business need effortlessly using the funds.

While securing an MCA or a bank loan, learning more about them is crucial. Learning how to qualify, spend, and repay the funds is important. At 18 Sierra Financial, we commit to guiding you. Make time to call or visit our offices today.