MCA Term Loan For Bad Credit With Fast Approval

Getting financing for a small business can be challenging, especially if you have less-than-perfect credit. Traditional bank loans usually require good credit, significant collateral, and a long time to get approved. That's where merchant cash advance (MCA) loans and alternative business loans can help. Companies like GreendayOnline, PaydayChampion, RixLoans, PaydayDaze, and GadCapital specialize in providing fast business financing for bad credit scenarios.

In this comprehensive guide, we will explain:

• What MCA loans are and how they work
• Top lenders offering MCA loans for bad credit
• Loan amounts, terms, and APR ranges
• Approval requirements and qualifying criteria
• The application and funding processes
• Pros and cons of MCA loans
• FAQs about MCA financing

Let's get started!

Best 5 Merchant Cash Advances for Small Businesses and Fast Approval

• GreendayOnline: Offers fast approvals and same day funding options, catering especially to small businesses seeking efficient financial solutions.
• PaydayChampion: Known for easy approval processes and no credit check options, PaydayChampion is a go-to for businesses with less-than-perfect credit.
• RixLoans: Provides unsecured merchant cash advances with an online application, making it convenient for businesses to obtain financing without collateral.
• PaydayDaze: Offers same day approval and funding, as well as no doc applications, streamlining the borrowing process for time-sensitive financial needs.
• GadCapital: Specializes in merchant cash advances with low-interest rates, ensuring affordable financing solutions for small and mid-sized businesses.

What Are MCA Loans and How Do They Work?

A merchant cash advance (MCA) provides fast financing by advancing a lump sum of capital in exchange for a percentage of future credit card or debit card sales. Sometimes called a business cash advance, it is not technically considered a loan but rather a purchase of future receivables.

Here is a quick overview of how MCA loans work:

• The lender provides an upfront lump sum payment, usually within a few business days of approval. This immediate influx of capital can be used as working capital to grow your business.
• Instead of fixed payments like a bank loan, you repay a fixed percentage of your daily credit/debit card volumes until the advance balances out. Typically, lenders take 5-20% of daily sales.
• The repayment automatically deducts each day from your credit card processing account until the advance is paid off. There are no set maturity dates or due dates to remember.
• Once repaid, the payments stop, and you have no further obligation to the MCA lender. There are no early repayment penalties.
• Approval is based more on credit/debit card sales volumes than credit scores. So, these advances can help business owners who may not qualify for bank loans.

The quick access to capital and flexible repayment structure make MCA an attractive financing option for many small business owners. Next, let's look at some top companies offering MCA loans for applicants with bad credit.

Top Lenders Offering MCA Loans for Bad Credit

GreendayOnline

GreendayOnline is one of the most established MCA funders, providing over $1 billion in small business financing since 2008. They are a direct lender, so the process is streamlined without any brokers as middlemen.

Loan amounts: $5,000 to $250,000

Terms: 3 to 12 months

APR range: 50% to 200%

GreendayOnline performs a soft credit inquiry that does not affect your score. Approvals are generally provided in 1-2 business days. Once approved, you can expect funding within 5 days.

PaydayChampion

In business since 2001, PaydayChampion has advanced over $500 million to American SMBs. Their MCA loans range from $10,000 up to $100,000.

Loan amounts: $10,000 to $100,000

Terms: 3 to 6 months

APR range: 120% to 240%

PaydayChampion also does soft credit checks during underwriting. Many applicants receive approval and funding within just 2 business days. Their reputation for fast financing makes them a top pick.

RixLoans

RixLoans specializes in loans for tech companies, commercial real estate owners, professional service firms, and more. In addition to MCA loans, they also offer longer-term business loans up to $2 million.

MCA loan amounts: $30,000 to $500,000

MCA terms: 3 to 24 months

MCA APR range: Up to 250%

Business loan amounts: Up to $2,000,000

Business loan terms: 1 to 5 years

RixLoans has a streamlined application process with automated decisioning that provides approval in minutes in many cases. Funding is promptly completed within 3-5 days after approval.

PaydayDaze

PaydayDaze is a direct lender known for super-fast financing. They offer MCA loans ranging from $5,000 up to $150,000.

Loan amounts: $5,000 to $150,000

Terms: 1 to 3 months

APR range: 199% to 249%

Soft credit pulls are used to enable rapid approvals in less than 24 hours in most cases. After signing your agreement, funds are sent to ACH within 1 business day. Their speed and flexibility make them a go-to for quick capital.

GadCapital

With over a decade in business, GadCapital is a trusted resource for small business financing. They provide both MCA loans and longer-term business loans.

MCA loan amounts: $30,000 to $250,000

MCA terms: 3 to 12 months

Business loan amounts: Up to $500,000

Business loan terms: 1 to 5 years

APR range: 130% to 260%

GadCapital offers a quick pre-qualification process online. Final approval takes just 1-3 days. Funding is prompt after signing agreements.

Loan Amounts, Terms, and APRs

Loan Amounts

As you can see from the top lender's overview, MCA loans typically range anywhere from $5,000 to $500,000. How much you qualify for depends on several factors:

• Your average monthly credit/debit card sales volume
• Time in business
• Financial health and cash flow
• Personal credit profile

Most lenders will advance an amount equal to 2-8 months of your average monthly card receipts. Having higher processing volumes will qualify you for larger advances.

Loan Terms

The term is the length of time you get to repay the MCA loan. Options range from 1 month to 24 months typically. Shorter terms of 3-6 months are most common. Longer terms have lower daily payment percentages but take longer to pay off.

APR Ranges

Annual percentage rates on MCA loans tend to be much higher than conventional bank financing. APRs from online lenders usually fall between 50% to 250%. Rates reflect the level of risk assumed by the lender. Having strong business revenues can possibly qualify you for a lower APR.

APRs are adjustable rather than fixed. Your specific APR depends on your unique situation, including credit history, time in business, processing volume, and the lender's policies. APRs also vary by state due to usury laws capping interest rates.

While APRs are high compared to other financing options, remember the term is short. You should be able to retire the advance within months as opposed to years. A focus on quick repayment can help limit the total interest paid.

Qualifying Criteria and Approval Requirements

Qualifying for an MCA loan primarily depends on your business's financial profile rather than personal credit scores. Many entrepreneurs with bad credit can still gain approval. Here are some typical eligibility standards:

• Time in business. Most lenders require at least 9-12 months of activity.
• Average monthly credit/debit card volumes. Higher processing means the ability to repay.
• Business revenue and cash flow. Sales and profits factor into eligibility.
• Positive bank account history. No overdrafts or non-sufficient funds.
• Valid government-issued ID.
• No current bankruptcies or tax liens.
• Legal US business entity. It cannot be structured as a non-profit or charity.
• It is not considered a cash advance business or gambling establishment.

Beyond initial eligibility, lenders analyze the overall risk level posed by your application. Having a detailed business plan helps. Approval decisions emphasize your ability to repay from business income rather than relying on personal assets or credit scores.

The Application Process

Applying for an MCA loan is designed to be fast and convenient:

Pre-qualification – Most lenders let you quickly pre-qualify online with just basic details about your business. Inputting your contact info and processing volumes takes just minutes to see potential loan amounts. Pre-qualification is not binding.

Initial application – The full application asks for basic information such as the business name, position, time in operation, gross annual revenue, average card receipts, how much capital you need, and intended use of funds.

Documentation – After initial review, the lender may request documentation to verify details. Required paperwork typically includes:

• Recent bank statements showing card processing deposits
• Government-issued ID proving identity
• Financial statements and tax returns
• Existing debt schedules
• Proof of business license and entity registration
• Lease or mortgage documents
• Other data deemed necessary to underwrite risk

Soft credit check – The lender does a soft inquiry on your personal credit which does not impact your credit score. It gives them an idea of your creditworthiness without a hard pull.

Review and decision – The lender analyzes all data and issues an approval decision in 1-3 days typically. If approved, closing documents are prepared.

Signing – Documents are signed electronically in most cases. This includes the MCA agreement stipulating the advance amount, repayment percentage, terms, fee breakdown, and legal disclosures.

Once signed, the lender sends your business the lump sum payment promptly.

Time to Funding After Approval

One of the biggest appeals of MCA loans is accessing funds quickly. Here are typical funding timeframes you can expect:

• Within 1 business day – The fastest lenders like PaydayDaze can deposit funds in as little as 24 hours after signing agreements.
• 3-5 business days – Many lenders take 2-5 business days to set up ACH transfers or wire transfers after final approval steps.
• Within 1 week – Even lenders on the slower end usually come through with funding within 5-7 business days from application to money in your account.

Getting financing in a week or less helps you jump on opportunities or cover emergency costs compared to traditional 30-60-day bank loan funding. Just be sure the lender you choose can deliver on fast turnarounds.

Pros and Cons of MCA Loans

Merchant cash advances provide valuable advantages that make them worth considering for small business funding. But there are some potential drawbacks to weigh as well.

Pros

• Fast funding – Most lenders provide capital in as little as 1-7 days which is much faster than conventional loans.
• Easy to qualify – Approval depends more on card sales than credit scores, so those with bad credit have better chances.
• Minimal documentation – Less paperwork is required compared to extensive bank loan applications.
• No collateral – Your business assets are not put at risk as security for the advance.
• Flexible payments – Repayment rises and falls based on your card volumes. Seasonal businesses benefit.
• No set maturity date – There is no fixed due date. You simply repay until settled.
• Direct lender – No brokers are involved, so it is a more streamlined direct process.
• No prepayment penalties – You can repay early with no extra fees.

Cons

• High APR – Interest rates are much higher than other financing options like bank loans.
• Daily repayments – The fixed percentage deductions from card sales occur every day, including weekends and holidays.
• Variable total cost – It is hard to calculate the exact total amount you will pay back since it fluctuates based on how long it takes you to repay.
• Card processor risk – Changing processors before paid off may trigger a default.
• Short terms – Maximum terms are usually 24 months or less, so the payments are larger.
• Personal guarantee – Most lenders require owners to personally guarantee the advance even if the business defaults.

While MCA loans are not ideal for long-term financing, their flexible underwriting and quick funding provide a valuable capital source for credit-challenged business owners in the right circumstances.

FAQs about MCA Loans

What credit score is required for an MCA loan?

Most MCA lenders do not have specific minimum credit scores. They focus more on your business revenues than personal creditworthiness. Even applicants in the 500s-600s FICO range may qualify if their business is financially sound. Each lender has their own underwriting policies.

How long does it take to get approved and funded?

Approvals often take just 1-3 business days once all documents are submitted. Funding generally occurs within 1-7 days after signing the agreement. Lenders promoting fast turnarounds can meet their timeline promises in most situations.

Can I get an MCA with no credit check?

Chances are slim since lenders need to review your profile to assess risks. However, MCA loans involve a soft inquiry that does not affect your credit score. Some lenders may use alternative data sources rather than a traditional bureau report.

Are MCA payments really daily?

Yes, repayments are extracted daily straight from your credit card receipts, including weekends and holidays. Some lenders only draft payments on weekdays, though. Daily deductions continue until the full amount is repaid.

What happens if I cannot repay an MCA loan?

If your card sales drop drastically, you may go into default if you cannot meet the minimum payments. Defaulting can lead to fees, penalties, higher rates, and being sent to collections. The lender may be able to garnish business accounts or assets.

Can I get an MCA loan for a startup business or a new company?

Most lenders want at least 9-12 months of operating history. Otherwise, it is hard to assess revenues and cash flow abilities. Startups generally need to look for alternative funding options until established.

Key Takeaways

• MCA loans provide fast financing for small businesses based more on card sales than credit scores.
• Top lenders like GreendayOnline, PaydayChampion, RixLoans, PaydayDaze, and GadCapital offer funding specifically for bad credit situations.
• You can qualify for lump sum amounts from $5,000 up to $500,000 with flexible 1-24 month repayment terms.
• Approvals take just 1-3 days in many cases, with funding in your account within 1-7 business days.
• While APRs are high, the short-term limits total interest paid. Repayment rises and falls based on daily card volumes.
• For credit-challenged business owners, MCA loans can provide much-needed working capital, expansion funds, or emergency cash faster than traditional bank loans.

Conclusion

For small business owners with less-than-perfect personal credit, accessing quick financing can seem daunting. However, the emergence of merchant cash advance loans and alternative lenders provides new opportunities. As our guide outlined, companies like GreendayOnline, PaydayChampion, RixLoans, PaydayDaze, and GadCapital specialize in expedited MCA loans while overlooking credit blemishes.

Within days, your business could secure an infusion of capital based more on processing volumes than FICO scores. The flexible terms make repayment manageable by fluctuating with card revenues. While not the cheapest form of financing, MCA loans fill a distinct role when you need funding faster than a conventional loan allows.

If you have bad credit but need immediate working capital or emergency funds, contact one of these leading MCA lenders for fast, flexible financing support. The streamlined process makes getting approved simple. In no time, you can access capital to take your small business to the next level.

Disclaimer: The reviewed loan websites are loan-matching services, not direct lenders, and have no direct involvement in loan acceptance or influence over APR and fund deposit speed. Requesting a loan does not guarantee approval, and some lenders may perform credit checks. Loans may not be available in all States. This article provides general information, and although we strive for accuracy, we are not liable for errors or omissions. Some links may be affiliate links, and we may earn commissions if clicked. Verify information independently and seek professional advice before making decisions; use of this article implies acceptance of these terms.