MCA vs term loan
60-second TL;DR
MCA repays as a % of daily sales; term loans have fixed payments. MCA is faster and more flexible for variable revenue; term loans suit stable cash flow and longer payback.
Core ideas
- • MCA: you sell future receivables. Repayment scales with sales.
- • Term loan: fixed monthly payment over a set period.
- • MCA fits: seasonal swings, need funding fast, shorter-term use.
- • Term loan fits: stable revenue, predictable expenses, equipment or longer projects.
- • Compare total cost, not just rate — factor vs APR measure differently.
Comparison
| Aspect | MCA | Term loan |
|---|---|---|
| Repayment | % of daily sales | Fixed monthly payment |
| Speed | 24–72 hours | 1–4+ weeks |
| Revenue fit | Flexible when sales drop | Fixed — harder if revenue dips |
| Cost metric | Factor rate | APR |
| Typical use | Working capital, gaps | Equipment, expansion |
Next steps
Capital works best with operations and continuity in view — not in silos.