Short Answer
A merchant cash advance gives trucking businesses fast cash (same day) in exchange for a percentage of future revenue. Factor rates of 1.1–1.5x translate to 40–150% APR. Use an MCA only as a last resort — invoice factoring, a line of credit, or a working capital loan are almost always cheaper.
Merchant Cash Advance for Trucking Companies: Costs, Risks & Alternatives
Key Takeaways
- → MCA factor rates of 1.1–1.5 mean you repay $110–$150 for every $100 you borrow.
- → Repayment is taken as a daily or weekly percentage of your bank deposits — can tighten cash flow significantly.
- → No fixed term — slower revenue means slower payoff; faster revenue means faster payoff.
- → MCAs are not loans — they're purchase agreements. Not subject to usury laws in most states.
- → Better alternatives exist for almost every use case. Consider MCA only when all others are exhausted.
MCA Real Cost: What Factor Rate Means in APR
MCA providers quote factor rates, not APR. Here's the translation for trucking businesses:
| Factor Rate | Cost on $50K | Approx APR (6-mo term) |
|---|---|---|
| 1.10 | $5,000 | ~40% |
| 1.20 | $10,000 | ~70% |
| 1.35 | $17,500 | ~100% |
| 1.50 | $25,000 | ~140% |
The One Case Where an MCA Makes Sense
There's one scenario where an MCA can be rational: you have a confirmed load contract worth significantly more than the MCA cost, you need funding in the next 24 hours, and you've exhausted all other options. Even then, try invoice factoring first — it's faster and cheaper.
Better Alternatives to MCA for Trucking
- Invoice factoring — Same-day cash, 2–5% fee vs. 40–150% APR. Almost always better. Compare factoring →
- Business line of credit — Rates from 6–25%. Revolving. Compare LOCs →
- Short-term working capital loan — Fixed payments, lower rate than MCA. Compare options →
Need Fast Cash? See All Options First
Our partner shows you all available options — including alternatives cheaper than an MCA.
Compare All Cash Options →