Comparison Guide
Merchant Cash Advance vs Bank Loan
Quick Answer: Choose MCA if you need money quickly (24-48 hours), have poor credit, or want flexible repayments. Choose bank loan if you have perfect credit, don't need money urgently, and want the lowest cost. MCA costs more but approves 90% vs banks' 62%.
Head-to-Head Comparison
Feature
Merchant Cash Advance
Bank Loan
Approval Speed
24 hours
4-8 weeks
Funding Speed
24-48 hours
6-12 weeks
Approval Rate
90%
62%
Credit Requirements
Minimal
Good-Excellent
Repayment Flexibility
Flexes with revenue
Fixed monthly
Cost
15-35% effective APR
5-10% APR
Collateral
None required
Often required
When to Choose MCA
You need money in 24-48 hours (emergency, opportunity)
You have poor credit or CCJs
Banks have rejected you
You are a newer business (under 2 years)
You want repayments that flex with sales (seasonal business)
You do not want fixed monthly payments
When to Choose Bank Loan
You have excellent credit (700+ score)
You do not need money urgently (can wait 6-8 weeks)
You want the lowest possible cost
You need a very large amount (£500k+)
You have collateral to offer
You are an established business (5+ years)
Cost Comparison Example
Borrowing £30,000 over 12 months
Merchant Cash Advance
Factor rate:1.15
Total repayment:£34,500
Cost:£4,500 (15%)
Daily repayment:£96 (varies)
Benefits:
- ✓ Get money in 24-48 hours
- ✓ 90% approval rate
- ✓ Flexible daily repayments
Bank Loan (8% APR)
Interest rate:8% APR
Total repayment:£32,420
Cost:£2,420 (8%)
Monthly payment:£2,702 (fixed)
Benefits:
- ✓ Saves £2,080 total
- ✓ Lowest cost option
- ✓ Predictable payments
Verdict
Bank loan saves £2,080 but MCA is 10x faster and 50% easier to get approved.
Compare Both Options for YOUR Business
Get personalized recommendations based on your business situation, credit profile, and funding needs.
✓ Free comparison • ✓ No obligation • ✓ Expert recommendations