The MCA Problem
Merchant cash advances are one of the most expensive and misunderstood products in commercial finance. These articles break down how they work, who they're right for, why Wall Street got interested, and how to sell them without becoming part of the problem.
4 articles in this series
How-ToWhen Is an MCA Actually the Right Call?
An MCA at a 1.45 factor rate sounds terrible until you compare it to the alternative. Sometimes the alternative is missing payroll, losing a lease, or watching a seasonal opportunity pass. The question isn't whether MCAs are expensive — they are. The question is whether the cost is worth what you get for it in your specific situation.
How-ToAPR, Factor Rates, and Fees: What Business Loan Rates Actually Mean
A 1.3 factor rate on a merchant cash advance sounds modest. It's often equivalent to a 60–120% APR. Understanding how business loan rates are actually calculated — and how fees, term length, and repayment structure distort them — is the only way to compare financing options honestly.
How-ToHow to Sell MCAs and Still Sleep at Night
Most MCA brokers who've been in the business long enough have a deal they wish they hadn't done. The product isn't inherently predatory — the sales practices often are. Here's the framework for knowing when to sell an MCA, when to walk away, and how to build a book of business that doesn't depend on borrowers not understanding what they signed.
NewsWall Street Has Discovered the MCA. God Help Us All.
The pitch deck practically writes itself: 'Alternative Direct Revenue Receivables — a diversified pool of short-duration, high-yield business finance instruments offering attractive risk-adjusted returns uncorrelated to traditional fixed-income markets.' Translation: we bought a warehouse full of advances to pizza shops at 85% APR and we'd like to sell you a piece.
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