Alternative to a merchant cash advance
There's a smarter way than a merchant cash advance
If daily debits are draining your business and you're stacking advances just to keep up, you're not alone — and you're not stuck. If you have equity in a home or property, you can replace expensive short-term capital with financing priced in the single digits.
See if you qualifyThe real cost
What an MCA actually costs you
Factor rate
Borrow $100K at a 1.4 factor and you repay $140K — regardless of how fast you pay.
Effective APR†
Converted to an annual basis, MCA pricing dwarfs nearly every other form of capital.
Debits
Automatic daily or weekly withdrawals from your receivables choke working capital.
A worked example
$100,000 of capital, two very different prices
Merchant cash advance
- ~$140,000 total repayment (1.4 factor)
- Repaid in ~9–12 months
- ~$520/business-day in debits
- Pressure to renew & stack
AltFi home equity line
- Single-digit APR, secured by equity
- Predictable monthly payment
- Draw only what you need
- Years to repay, no daily drain
Illustrative example for comparison only. Actual figures depend on your terms.
Side by side
Home equity vs. a merchant cash advance
| AltFi Home Equity Secured by your equity | Merchant Cash Advance Unsecured advance | |
|---|---|---|
| Cost of capital | From 6.75% APR* | 40%–350%+ effective APR† |
| How you repay | Predictable monthly payments | Daily or weekly ACH debits |
| Term | 10–30 years | 6–18 months |
| Effect on cash flow | Light, monthly | Heavy, drains daily receivables |
| Renewal pressure | None — one clean line | Frequent costly renewals & stacking |
| Draw as needed | ✓ Redraw as you repay | ✗ Lump sum only |
| Builds toward | Lower cost over time | A cycle of dependence |
†MCA 'effective APR' reflects factor-rate pricing annualized; typical ranges from public sources. *Illustrative starting rate via licensed lending partners; not a commitment to lend.
How to get out of the MCA cycle
- 1. Add up your current advances — balances, daily/weekly debits, and payoff amounts.
- 2. Check the equity in your home or property — that's your lower-cost capital.
- 3. Prequalify with AltFi (soft credit check) to see what you'd qualify for.
- 4. Use the new, lower-cost facility to pay off the advances and breathe again.
Common questions
Why is a merchant cash advance so expensive?
MCAs are priced with a factor rate (for example, 1.4), not an interest rate. Repaying $140,000 on a $100,000 advance over a few months can translate to an effective APR of 40%–350%+. Daily or weekly debits from your receivables compound the strain on cash flow.
How is equity-backed capital cheaper?
Because the financing is secured by your home or property, the lender's risk is lower, so the rate is dramatically lower — typically single digits. You also repay monthly over years instead of daily over months.
Can I use a HELOC to pay off my MCA?
Yes. Many business owners use a HELOC or cash-out refinance to retire one or more expensive advances, replacing daily debits and 40%+ costs with a single, low-rate monthly payment. This is one of the most common reasons owners come to AltFi.
I have several stacked advances — can you still help?
Often, yes. If you have equity in a property, we can explore consolidating multiple advances into one lower-cost facility. Check your options to see what's possible — it's a soft credit check with no score impact.
Will switching hurt my credit?
Prequalifying is a soft inquiry with no impact to your score. Replacing high-cost debt with a structured, lower-rate facility can be a healthier long-term position for your business.
Replace expensive capital with something smarter.
Check your options in minutes — a soft-credit prequalification with no impact to your score, and no obligation.