A Business Term Loan<\/strong> is cheaper, more predictable, and better for planned investments. A Merchant Cash Advance<\/strong> is faster, more flexible with credit, and better when your revenue is volatile or urgent. They are two different tools for two different problems, and using the wrong one is expensive.<\/p>\n An MCA is not technically a loan. It is a purchase of your future credit card receivables at a discount. The funder gives you cash today, then collects a fixed percentage of your daily credit card sales until they have received the agreed-upon total.<\/p>\n Because it is structured as a purchase of future revenue rather than a loan, MCAs have different rules than traditional lending. There is no fixed monthly payment. There is a fixed total payback (called the factor rate) and it comes out of your sales automatically.<\/p>\n A business term loan is the classic setup: lump sum today, fixed monthly payment, fixed interest rate, fixed term. You pay the same amount on the 1st of every month whether you had a record-breaking week or the slowest week of the year.<\/p>\n The single most common mistake we see in 2026 is businesses stacking two or three MCAs on top of each other to cover cash-flow shortfalls. Each new MCA takes an additional percentage of daily sales, and the compounding cost can push a healthy business into insolvency in 90 days.<\/p>\n If you already have one MCA outstanding and are considering another, call us first at 1-866-315-LEND<\/strong>. A consolidation term loan is almost always the cheaper, smarter play, and our platform is specifically built to match businesses in this situation with lenders that specialize in MCA refinance.<\/p>\n Ask yourself three questions:<\/p>\nWhat is a Merchant Cash Advance (MCA)?<\/h2>\n
What is a Business Term Loan?<\/h2>\n
Head-to-head comparison<\/h2>\n
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\n \nFactor<\/th>\n Business Term Loan<\/th>\n Merchant Cash Advance<\/th>\n<\/tr>\n<\/thead>\n \n Typical amount<\/td>\n $10K to $500K<\/td>\n $5K to $500K<\/td>\n<\/tr>\n \n Speed to funding<\/td>\n 24 to 72 hours<\/td>\n Often same day<\/td>\n<\/tr>\n \n Credit minimum<\/td>\n 600+<\/td>\n 500+<\/td>\n<\/tr>\n \n Time in business<\/td>\n 6+ months<\/td>\n 3+ months<\/td>\n<\/tr>\n \n Payment structure<\/td>\n Fixed monthly<\/td>\n Percentage of daily sales<\/td>\n<\/tr>\n \n Cost expression<\/td>\n APR (annualized)<\/td>\n Factor rate (e.g., 1.2x, 1.4x)<\/td>\n<\/tr>\n \n Effective cost range<\/td>\n 9 to 35% APR<\/td>\n 40 to 80% effective APR<\/td>\n<\/tr>\n \n Collateral<\/td>\n Sometimes<\/td>\n Never (revenue-based)<\/td>\n<\/tr>\n \n Prepayment benefit<\/td>\n Usually yes<\/td>\n Rarely (amount is fixed)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n When an MCA is the right call<\/h2>\n
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When a term loan is the right call<\/h2>\n
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The expensive mistake: stacking MCAs<\/h2>\n
How to decide in 5 minutes<\/h2>\n