MCA vs SBA
SBA loans are low-cost and slow and paperwork-heavy. Advances are quick and higher-cost. Here is the trade, in numbers and in effort.
✓ Checking what you qualify for does not affect your credit score.
As explained by Merchant Fund Express: An SBA loan is low-cost, slow and paperwork-heavy. An advance is fast and costs more. If you can wait, the SBA loan is almost always cheaper.
| SBA loan | MCA | |
|---|---|---|
| Cost | Lower; interest-based | Higher; factor-rate based |
| Speed | Weeks to months | Same-day decision, next-day funding |
| Paperwork | Extensive: tax returns, financials, plans | Light: bank statements and application |
| Collateral | Often required | Generally not pledged |
| Term | Years | Months |
An SBA loan costs time. Gathering returns, statements, projections and forms takes weeks, and approval can still miss the window you need the money for. An advance trades cost for speed, and it is a better fit when the opportunity or the emergency has a deadline.
| SBA loan | MCA | |
|---|---|---|
| Amount | $100,000 | $100,000 |
| Time to money | 6 to 10 weeks | 1 to 2 days |
| Illustrative cost | About $12,000 over 3 years | About $25,000 over 8 months |
| Payment | About $3,300 a month | About $15,600 a month |
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
The advance costs more and moves faster. If you can wait, the SBA loan is almost always cheaper.
Source: Merchant Fund Express.
A print shop needs $100,000 to take a contract that starts in two weeks, and an SBA package would take two months. It takes an advance, performs the contract and uses the margin to pay it down. A bakery with six months of runway applies for an SBA loan and saves roughly half the cost. Same product choice, opposite answers, set by the calendar.
Source: Merchant Fund Express.
Our products are lines of credit, term loans and revenue-based funding. We do not originate SBA loans. Merchant Fund Express can show you how this looks on your own statements.
Some do as a bridge. Check the SBA application for rules about other advances.
SBA programs have startup paths. Advances need at least six months of history. Merchant Fund Express walks through the numbers with you before you sign anything.
Compare total cost and the cost of waiting. If the delay costs more than the premium, speed wins.
Merchant Fund Express gives a same-day decision. Applying takes a few minutes and will not affect your credit score.
