Franchise funding
The verdict first, then the side-by-side, the checklist and the arithmetic for two hypothetical franchise owners with the same need.
✓ Merchant Fund Express starts with a soft credit pull. Terms depend on your business's revenue and history.
Updated October 21, 2026 · Merchant Fund Express
Verdict: a franchise owner with 3+ years open, FICO 650+, no current advance and a need inside 15% of annual revenue should take the business loan, because weekly payments and 0% origination cost less. An owner with 6+ months open, FICO 600+, an existing position or a need above the loan cap fits the merchant cash advance, which is sized to deposits. Merchant Fund Express funds both for existing franchise owners and makes a same-day decision on a complete file.
Pick by the file you have today, not by the product name. The business loan (the site's term loan) rewards a seasoned, clean unit: $10,000 to $250,000, 12 to 18 months, weekly payments and 0% origination. The merchant cash advance rewards a unit with steady card deposits that is younger, carries an existing position or needs a larger amount; it is a purchase of future receivables repaid by daily or weekly debits until the agreed amount is reached, so it is not a loan.
Our general merchant cash advance vs business loan comparison covers the mechanics for any business. This page is the franchise version: how royalty debits, unit-level deposits, separate entities and franchisor-scheduled spending change the answer. Final terms depend on the business's revenue and history.
| Business loan | Merchant cash advance | |
|---|---|---|
| What it is | Term loan with a fixed schedule | Purchase of future receivables; not a loan |
| Amount | $10,000 to $250,000, capped at 15% of annual revenue | Sized to deposits, within the $25,000 to $5,000,000 range |
| Term | 12 to 18 months | Until the agreed amount is reached |
| Payment | Weekly (not daily) | Daily or weekly debits |
| Upfront cost | 0% origination | Set by the offer; compare total repaid |
| Time in business | 3+ years | 6+ months |
| FICO | 650+ | 600+ |
| Existing positions | First position only | Up to 2 current advances |
| Early repayment | 50% off the remaining scheduled interest | Ask before signing |
| Next step | After 50% repaid, eligible to renew into a line of credit | Renewal reviewed on new statements |
Choose the business loan when:
Choose the merchant cash advance when:
Both owners need $120,000 for a franchisor-scheduled interior refresh. Owner A runs one unit in its own LLC, open 6 years, FICO 700, deposits of $80,000 a month ($960,000 a year), no advance. Owner B runs two units in one LLC, open 20 months, FICO 615, deposits of $140,000 a month, one existing advance.
| Line | Owner A | Owner B |
|---|---|---|
| Product that fits | Business loan | Merchant cash advance |
| Cap check | $960,000 x 15% = $144,000, so $120,000 fits | Sized to deposits; loan not available (under 3 years, existing position) |
| Total repaid (illustrative) | $132,600 | $159,600 |
| Cost of capital | $132,600 - $120,000 = $12,600 | $159,600 - $120,000 = $39,600 |
| Payment | $132,600 / 78 weeks = $1,700 a week | $159,600 / 210 business days = $760 a day |
| Monthly equivalent | $1,700 x 52 / 12 = about $7,367 | $760 x 21 = $15,960 |
| Burden on deposits | $7,367 / $80,000 = about 9.2% | $15,960 / $140,000 = 11.4% |
If Owner A repays early with $3,200 of scheduled interest left, the 50% reduction saves $1,600. Owner B's figure already counts the existing advance and both units' royalty debits in the room left after the payment.
Figures in this example are illustrations of the arithmetic, not an offer, quote or approval. Real terms depend on the file and the funder.
No tax returns for a typical first review. Read the franchise funding document checklist before you upload.
A recurring, uneven need fits a franchise line of credit better than either. Seasonal units can compare revenue-based financing vs MCA. If you do not operate a unit yet, start with existing vs new franchise funding: Merchant Fund Express funds operating owners, and opening another unit is reviewed on the deposits of the units you already run. Everything else lives on the franchise funding hub.
No. It is a purchase of future receivables repaid by daily or weekly debits until the agreed amount is reached. The business loan is the term product with a fixed weekly schedule.
They count as normal recurring costs. Merchant Fund Express sizes the payment after royalty and ad fund debits, the same way it treats rent or payroll.
Not on the same entity; the term loan is first position only. An MCA can sit alongside up to 2 current advances, and a new structure can lower the payment you carry today.
The entity that will carry the payment. Each is reviewed on its own deposits, so a seasoned unit can take the loan while a newer one takes an MCA.
Same-day decision on a complete file, with funding often the next business day.
Scores from 500 are considered; 600+ is the MCA tier and 650+ is the business loan tier.
Merchant Fund Express reviews your location's revenue, deposits and existing payments. Same-day decision on a complete file; funding often the next business day. About five minutes to apply.
