Merchant cash advances for contractors
Quick answer
A merchant cash advance (MCA) gives you a lump sum repaid as a fixed daily or weekly cut of your revenue, plus a fee quoted as a factor rate. It funds fast and approves with weak credit — but it's among the most expensive financing a contractor can take.
For most construction businesses, invoice factoring or a line of credit solves the same problem far more cheaply.
Let me be straight about this one, because the sales calls won't be.
Merchant cash advances are fast and easy, and that's the trap. The speed is real, but so is a cost that can quietly bury a thin-margin contractor.
Key takeaways
- → An MCA is a revenue advance repaid daily or weekly, priced with a factor rate.
- → It funds fast and approves with weak credit — but the effective cost is very high.
- → Daily repayment strains the exact cash flow you're trying to fix.
- → Factoring, a line of credit, or equipment financing are almost always cheaper.
How an MCA works
You get a lump sum, and the provider collects a fixed amount from your bank account every business day or week until the advance plus fee is repaid.
The cost is a factor rate, not an interest rate. A $50,000 advance at a 1.3 factor means you repay $65,000, regardless of how fast you pay it back.
The real cost
Converted to an APR, MCA pricing often runs into the high double or triple digits — far above a line of credit or term loan. Compare it honestly on our rates page.
Worse, the daily deduction pulls cash out of the business every single day, which can deepen the cash-flow hole you took the advance to fill.
When it might make sense
An MCA is a last resort — when you need cash immediately, can't qualify for anything cheaper, and have a clear, short payback that justifies the cost. Even then, go in with eyes open.
Cheaper alternatives for contractors
Almost always, there's a better tool. Invoice factoring solves the same fast-cash problem at a fraction of the cost and is approved on your clients' credit. A line of credit or bad-credit-friendly loan beats an MCA on cost.
Before taking an advance, compare real options. eBoost Partners offers lower-cost products — factoring, lines of credit, and more — through its construction business financing.
Related guides
Working capital & cash flow
Cheaper ways to bridge gaps.
Invoice factoring
Fast cash at a lower cost.
Business line of credit
Reusable, lower-cost credit.
Bad-credit business loans
Other options with weak credit.
Construction loan rates
Compare the real cost.
Loans for contractors
Better-fit financing.