Merchant Cash Advance (MCA).

What it is

A Merchant Cash Advance (MCA) is a lump-sum advance against future business revenue. Repayment is made via daily or weekly ACH deductions tied to a percentage of revenue — typically 8–15% of daily deposits. Legally, an MCA is structured as a sale of future receivables, not a loan, which is how the product avoids most state usury caps. Effective APR equivalents commonly run 40–150% depending on the factor rate and the holdback period.

Underwriting is fast: 24–72 hours from application to funding, based primarily on bank deposits rather than credit. The MCA quote uses a "factor rate" of 1.2–1.5: a carrier receiving $50K at a 1.4 factor rate repays $70K total. There is no APR on the contract — the cost is baked into the factor rate and the holdback timeline. In trucking, MCAs are most common as emergency working capital after a major repair, an unexpected insurance event, or a slow-paying broker that disrupts cash flow.

Why it matters for trucking finance

MCAs are fast but expensive. Legitimate use cases exist — emergency repair, time-sensitive opportunity — but stacking multiple MCAs is the leading cause of owner-operator insolvency. Lenders evaluating any other working-capital application will heavily discount or decline applicants with active MCA balances. Aggressive MCA providers also file blanket UCC-1s on "all assets," which can block other lenders from securing collateral for years afterward.

Related terms

• Working Capital — Short-term unsecured business funding used to bridge cash-flow gaps, cover operating expenses, or capitalize on opportunities; APR typically 14–34%.
• Term Loan — Lump-sum business loan repaid over a fixed schedule with interest; the standard structure for equipment purchases and major capital expenditures.
• UCC-1 — Uniform Commercial Code financing statement filed by a lender or factor to publicly establish a security interest in business assets.

Related Dispatched products

• Trucking working capital
• Dispatched methodology