A merchant cash advance (MCA) is a financing option where a business receives a lump sum of cash in exchange for a percentage of its future sales. This type of financing is particularly appealing to businesses that need quick access to funds.
A business loan is a sum of money borrowed by a business from a lender, such as a bank, credit union, or alternative financing company, to fund various business activities. These loans typically come with specific terms for repayment, including interest rates, repayment schedules, and durations.
A business line of credit is a flexible financing option that allows businesses to borrow money up to a predetermined limit as needed, rather than receiving a lump sum like a traditional loan. Once approved, the lender establishes a credit limit based on the business's financial health and creditworthiness.
Factoring is a financial arrangement in which a business sells its accounts receivable (invoices) to a third party, known as a factor, at a discount. This allows the business to receive immediate cash flow rather than waiting for customers to pay their invoices.
