MCA vs. LOC vs. Loan — Which Fits Your Business?
Last reviewed: September 09, 2025
Not all capital is created equal. A Merchant Cash Advance (MCA), a Business Line of Credit (LOC), and a Short‑Term or Bank Loan each solve different problems. At QuickWave, we believe in spelling out the differences so you can make a smart, apples‑to‑apples decision.
When MCA Fits
- Speed: 24–72 hr funding once docs are in.
- Cash‑flow underwriting: based on deposits, not FICO.
- Great for: short‑term gaps, payroll, vendor discounts, seasonal spikes.
When LOC Works Best
- Flexibility: draw and repay as needed.
- Cost‑effective: interest only on what you use.
- Great for: recurring working capital, projects, uneven receivables.
When Loans Make Sense
- Larger checks: often $250k–$2M+
- Longer terms: 2–5 years, sometimes longer.
- Great for: expansion, equipment purchases, acquisitions, major renovations.
- Trade‑off: slower underwriting, heavier documentation, collateral often required.
Side‑by‑Side Comparison
| Feature | MCA | LOC | Loan |
|---|---|---|---|
| Funding speed | 24–72 hrs | 5–10 business days | 2–6 weeks |
| Docs required | Bank statements | Financials + tax returns | Full package + collateral |
| Repayment | Daily/weekly split | Monthly, flexible | Monthly, fixed |
| Cost | Factor rate (40%–150% APR equiv.) | APR (8%–40%) | APR (6%–20%) |
| Best for | Short gaps, urgent needs | Ongoing working capital | Expansion, large projects |
QuickWave’s Pro‑Business Take
Each option has a place. We often start clients on an MCA for immediate needs, then transition to an LOC for stability, and graduate into a bank or asset‑backed loan for growth. The goal: keep you bankable and set you up for long‑term success.