MCA vs Personal Loans in Edmonton

When most small business owners consider obtaining access to capital for improvements or upgrades, they think of a traditional loan from a bank. There are actually a few different ways that small- and medium-sized businesses can obtain the cash they need to see their businesses grow and thrive. An alternative to the traditional business or personal loan is what is called a merchant cash advance (MCA). For many, this is a far more attractive way to borrow money than going through the normal channels with a regular bank.


A personal loan can be difficult to obtain and it goes on your personal credit history. This can end up being really bad news for small business owners as the repayment terms are not in any way dependent on the revenue brought in. Personal loans tend to be given at fairly high interest rates and they must be paid back in regular monthly payments regardless of how much business one does.


With a MCA, the process is a bit different. Firstly, it isn’t even technically a loan. The application process is simple and straightforward. Many applicants can receive approval for the cash they need in as little as 24 hours. With a traditional loan, the process takes far longer. What follows is the basic gist of how a MCA works:


  • An advance, not a loan: since it is not technically a loan, the MCA works a little different. In essence, it is an extension of cash that is to be repaid with a percentage of your daily earnings. There are also some extra fees included, but they do not come close the the interest paid on a personal loan.
  • No ridiculous requirements: With a traditional bank loan, you have to put up some form of collateral and you also need to have an excellent credit score. With a MCA’s there is no need to put up collateral and will provide advances even to those with less-than-perfect credit scores.
  • Automatic payment: The advance is repaid out of credit and debit purchases made through your establishment. A small percentage of each purchase you receive will go towards paying back the cash advance to you.


It is easy to see why so many small- and medium-sized business owners choose a MCA over a personal loan or a traditional business loan. The terms are more reasonable and are dependent on sales. Lenders like Canadian Merchant Cash Advance provide business owners with the cash they need to upgrade their establishments and services, expand, or do whatever you need to do to make your business thrive.

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