Franchise funding
Same tier, same review, different payment shape: how a franchise unit's deposit pattern picks the winner.
✓ 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 seasonal franchise unit, where deposits swing between slow and peak months, should pick revenue-based financing, because a payment set as a share of revenue shrinks in the slow months. A unit with steady deposits all year fits the merchant cash advance, whose fixed daily or weekly debit is simple to plan around. Neither is a loan. Merchant Fund Express offers both to existing franchise owners on the same Tier 2 review.
Both products sit on the same review: 6+ months open, FICO 600+, $60,000 in verifiable revenue, an $800 minimum daily balance, at most 5 negative days or NSFs, up to 2 current advances, no open bankruptcies and no prior defaults. California and New York carry extra restrictions. So the choice is not about qualifying; it is about the shape of the payment against the shape of the unit's deposits.
The general revenue-based financing vs merchant cash advance page covers the mechanics. Here we apply them to franchise units. Final terms depend on the business's revenue and history.
| Revenue-based financing | Merchant cash advance | |
|---|---|---|
| What it is | Repaid from revenue; not a loan | Purchase of future receivables; not a loan |
| Payment shape | A share of revenue, or fixed payments sized to revenue | Fixed daily or weekly debit |
| Slow month | Payment falls with a share structure | Payment stays the same |
| Peak month | Payment rises | Payment stays the same |
| End point | Agreed amount reached | Agreed amount reached |
| Planning | Varies with sales | Same figure every period |
| Qualification | Tier 2 | Tier 2 |
| Range | $25,000 to $5,000,000 | $25,000 to $5,000,000 |
Choose revenue-based financing when:
Choose the merchant cash advance when:
Hypothetical: one unit depositing $60,000 in slow months and $120,000 in peak months, averaging $90,000. It takes $100,000, and to compare the shapes fairly, both options repay $130,000.
| Line | Revenue-based financing | Merchant cash advance |
|---|---|---|
| Payment rule | 8% of monthly revenue | $1,600 a week |
| Slow month | $60,000 x 8% = $4,800 | $1,600 x 52 / 12 = about $6,933 (11.6% of $60,000) |
| Peak month | $120,000 x 8% = $9,600 | about $6,933 (5.8% of $120,000) |
| Average month | $90,000 x 8% = $7,200 | about $6,933 |
| Time to reach $130,000 | $130,000 / $7,200 = about 18 months | $130,000 / $1,600 = 81.25, so 82 weeks |
Same total, different pressure: the share structure takes $2,133 less than the fixed debit in a slow month ($6,933 - $4,800) and more in peak months, when the unit can afford it. If this unit's deposits were flat at $90,000 every month, the two would run almost side by side, and the fixed MCA debit would be the simpler one to plan around.
Figures in this example are illustrations of the arithmetic, not an offer, quote or approval. Real terms depend on the file and the funder.
Run your own figures in the revenue-based financing calculator and check the franchise funding requirements.
With 3+ years open and FICO 650+, a franchise line of credit or a business loan can cost less; compare MCA vs business loan for franchise owners. Merchant Fund Express covers every product an operating franchise owner uses; see the franchise funding hub.
No. It is repaid from revenue until the agreed amount is reached. A merchant cash advance is also not a loan; it is a purchase of future receivables.
Yes. Both use the Tier 2 review: 6+ months open, FICO 600+, $60,000 verifiable revenue and an $800 minimum daily balance.
Usually revenue-based financing with a share structure, because the payment eases in slow months.
They are counted as normal recurring costs, and the payment is sized after them.
Yes; both states carry extra restrictions that the review applies.
Same-day decision on a complete file; funding often the next business day.
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.
