💼 Although both provide funding to businesses, they are structured differently. A Merchant Cash Advance (MCA) is generally structured as the purchase of a specified amount of a business’s future receivables. Business Term Financing is a commercial loan in which a lender provides a lump sum that is repaid over an agreed term with principal and interest.
🧾 Example — for illustration only: A business needs $100,000. With an MCA, the business may receive a $100,000 purchase price in exchange for delivering a larger purchased amount from future receivables over an estimated period. With Business Term Financing, the business borrows $100,000 and repays the loan through scheduled payments of principal and interest over the agreed loan term.
⚠️ Important: This example is for educational purposes only. Actual financing structures, costs, repayment obligations, eligibility requirements, and terms vary by provider and agreement.