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Merchant Cash Advance Solutions If You Have Bad Credit

Small business owners can qualify for merchant cash advances (MCA) even if they have bad credit by providing other information, such as three months of bank statements and other examples of their revenue. If you need funding for your business fast and have a poor credit history, an MCA can help. 

Are you a business owner with bad credit looking for financing options for your company? Are you unsure what solutions are available with your poor credit history? While securing a loan with poor credit may not be an option, merchant cash advances are another way to get funding. 

We will explain how you can get a merchant cash advance with bad credit, the impact of bad credit when looking for business funding, and considerations to consider when securing an MCA. Keep reading this article from Sunwise Capital to learn more!

Merchant Cash Advance Solutions Bad Credit

Getting a Merchant Cash Advance with Bad Credit 

You can get a merchant cash advance with bad credit by applying through a direct lender. 

You can apply online, with some direct lenders giving same-day approvals. While traditional bank loans use your credit history to determine your funding opportunities, MCA lenders do not. 

When applying for your MCA, you will be asked to provide proof of business revenue, such as three months of bank statements. Your merchant cash advance lender will also consider your company’s time in operation and accounts receivables. 

If you are approved, these direct lenders will provide a lump sum of cash in exchange for a portion of your future credit card sales. This means you will be repaying the advance through a percentage of your daily credit card transactions. 

How is a Merchant Cash Advance Different than a Loan? 

A merchant cash advance is different from a loan because it is an advance against future purchases instead of a debt. While both give businesses capital, their eligibility criteria and repayment systems are different.  

An MCA is an advance against future purchases, meaning your MCA direct lender will debit money from your daily credit card transactions as your repayment. The repayment amount varies depending on the amount of capital you were given and the factor rate. 

Another way a merchant cash advance differs from a loan is there is generally no grace period with an MCA. You will be expected to begin repaying the money immediately after the funds have been granted. 

Bad Credit and Small Business Funding Eligibility

Companies use credit to rate your history of repaying debt, and most banks or credit unions will not grant loans to those with poor credit history. This means small business owners can go without the funding they need, which makes merchant cash advances a unique solution for those with bad credit. 

MCA lenders don’t need their applicants to have high FICO scores as they will use other ways to determine if you are qualified for an advance. With a merchant cash advance, you can use the capital provided to you by your direct lender to invest directly back into your company. 

Who Qualifies for Merchant Cash Advances? 

Almost any business can qualify for a merchant cash advance as long as it has daily or monthly credit card sales. Your direct lender will work with you to help you find the best financing plan for your business. 

Some examples of companies that qualify for merchant cash advances are: 

  • Restaurants
  • Hotels
  • Doctors
  • Dry Cleaners
  • Hair Salons & Spas
  • Dentists
  • Auto Repair Shops
  • Fitness Centers
  • Franchise Businesses
  • Brick-and-mortar and Online Retailers

How Can You Use a Merchant Cash Advance

Small business owners can use their merchant cash advances for a wide variety of things, such as payroll, taxes, and other purposes. One of the benefits of merchant cash advances is the ability to use your money in the way you see fit, unlike more strict business loan requirements. 

Here is a list of just some of the ways your business could use your merchant cash advance:

  • Payroll
  • Expansion
  • Inventory
  • Upgrades
  • Taxes
  • Hiring New Employees
  • Bills

Merchant cash advances are available to help your business thrive with the capital you need. With same-day approvals and a quick application process, you can use your cash advance to improve and invest in your company and help build your revenue. 

Considerations for Getting an MCA with Bad Credit

When applying for a merchant cash advance with bad credit, you should be aware of the high factor rates and the daily or weekly payments. While merchant cash advances can be a valuable financial tool for small businesses, they’re not always the right fit for every company. 

  • High Factor Rates: While having a bad credit history will not disqualify you from receiving a merchant cash advance, your factor rates may be higher due to your score. High factor rates make merchant cash advances more expensive than traditional bank financing.  
  • Daily or Weekly Payments: Your direct lender will typically put you on a daily or weekly repayment plan, which means merchant cash advances are not a good solution for businesses that do not have a strong flow of revenue. 


Bad credit isn’t an issue when getting a merchant cash advance from a direct lender, as they will use other information like your business revenue to determine if you qualify. With a merchant cash advance, you can receive the capital you need for your business within days. 

Are you ready to see if you qualify for a merchant cash advance? Talk to an expert at Sunwise Capital today! We offer business financing options across multiple states, from California to New York, with various options to address your specific business needs.

We can help you find the right financial solution for your business’s unique needs. Contact us online, email us at [email protected], or call us at 888-­456-9223 to get started. 

Frequently Asked Questions: Merchant Cash Advance Solutions Bad Credit

What information do I need to provide when applying for a cash advance with bad credit?

When applying for a merchant cash advance with bad credit, you will need to supply 3 months of bank statements. You will need proof of your business performance, which is why you need to share your bank statements and other revenue information. 

What credit score is considered to be bad credit by most lenders?

Most lenders will see any credit score under 620 as bad credit. Credit scores can range from around 300 to 850, with 630 to 689 considered a “fair” score and 690 to 719 considered a “good” score. MCAs may be willing to lend to someone with a 500 or higher.

What are the drawbacks of getting a merchant cash advance? 

Some drawbacks of merchant cash advances to consider are the high factor rates and daily repayments. High factor rates can mean you end up repaying more money than you would with a traditional business loan, and daily repayments make MCAs an unwise choice for businesses with poor revenue. 

Can getting a merchant cash advance with bad credit help improve my credit score?

Your payments on your merchant cash advance will not improve your credit score, as cash advances do not report payments to the main credit bureaus. However, if you default on your merchant cash advance, you can be reported to a credit bureau and lose options for financing in the future. 

Mark 7

Mark J. Kane, Founder & CEO of Sunwise Capital, is a distinguished entrepreneur with over 16 years in business financing. Beginning as a psychologist, he quickly became a trailblazing Hospital Administrator. Mark has built multiple ventures, notably accelerating a startup to $18M within months. His transition to Sunwise Capital stems from a deep-seated desire to empower business owners with strategic financial solutions. Recognized for his expertise, Mark's leadership at Sunwise Capital reflects his commitment to fostering business growth and success. Click the link to read more about the author.

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