MCA vs Term Loan vs Factoring
MCA vs term loan (and why the cheap-looking one is expensive)
The advance that can hit this afternoon looks cheaper than a term loan that takes underwriting. Then daily ACH starts. That is the file on daily ACH and MCA debt relief.
Related: How we work a file · MCA debt relief · Business debt relief
Factor vs APR, daily vs monthly, UCC, PG
| Merchant cash advance | Term loan | Factoring | |
|---|---|---|---|
| Price | Factor rate on the funded amount. Not an APR, even when someone quotes one. | Interest / APR on a balance, usually monthly. | A discount on invoices sold. You are selling receivables, not borrowing a term. |
| Collection | Daily or weekly ACH against the operating account. | Monthly (sometimes weekly) payment. | Against the invoices / debtors, not a daily sweep of all receipts in the same way. |
| UCC | UCC-1 on the business is common. Stacking adds filings. | May have a UCC, usually as part of a loan package. | Often a UCC on the receivables. |
| Personal guarantee | Common. Often signed because the money had to hit that afternoon. | Common on small-business term loans, disclosed as a loan guarantee. | Varies. Still a commercial file, not consumer debt. |
Why the cheap-looking one is expensive
A factor that looks small on a one-page offer still takes first claim on cash every banking day. A term loan APR that looks higher on paper can still be the payment the operating account can hold. That is why refinance / take-out is about killing the daily debit — not about finding a prettier factor. Another MCA is not a term loan. Fake consolidation is a stack.
If you already have the MCA
The comparison is no longer theoretical. Work the file: how we work an MCA file. US owners. Consulting firm. Not a law firm. Not a settlement company.
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If you are comparing a new advance to a term loan you cannot get this afternoon, put both sets of numbers on the table — factor, debit, UCC, and guarantee — before the cheap-looking one hits.
St. Germain Strategy is an advisory firm. We are not a law firm, we do not provide legal advice, and we are not a debt settlement company. We do not hold client funds. When a file needs licensed counsel, we will say so and help you prepare to work with them.
