Short-Term MCA
Short-term MCA refers to advance products structured for 60-120 day repayment terms — distinguished from standard 6-12 month MCA by faster repayment, smaller advance amounts, and higher effective cost-of-capital due to compressed amortization.
Why This Matters
Short-term MCA products serve merchants with very specific short-duration capital needs — bridge financing for inventory cycles, pre-revenue funding for known upcoming receivables, or seasonal capital for short-cycle business operations. The faster repayment dramatically increases APR-equivalent cost (a 1.20 factor at 60-day term is roughly 80% APR-equivalent). For merchants with genuine short-cycle capital needs, short-term MCA can be appropriate; for merchants with longer-term capital needs, short-term structures impose unnecessarily high cost. Short-term programs are typically smaller dollar size ($10K-$75K range).
Frequently Asked Questions
Frequently Asked Questions
When does short-term MCA make economic sense?
When merchant has genuine short-cycle capital need with known repayment source — inventory bought today and sold in 60 days, contract financing where customer payment is contractually scheduled, seasonal capital that resolves with predictable revenue cycles. Without specific short-cycle alignment, short-term MCA imposes unnecessarily high cost.
How does short-term MCA differ from bridge financing?
Bridge financing typically refers to interim financing pending a specific known capital event (sale of property, receipt of large receivable, completion of permanent financing). Short-term MCA is the same general concept applied to revenue-share funding products. Both serve short-duration capital needs but with different product structures.