Quarrymoor Financial, a small-business funding service in Kingman, Arizona, arranges merchant cash advances through funding partners for Mohave County, AZ businesses with steady card or bank receipts. A merchant cash advance is a purchase of future receivables, not a loan. This page explains holdback percentages, factor rates, stacking and a worked example. Partners make credit decisions and set rates and terms.
| What it is | A provider buys a slice of future receipts; no loan involved |
|---|---|
| How the provider collects | A percentage of daily receipts, or set debits |
| Quick-service dining employers in Mohave County, AZ | 147 payroll-paying firms on the CBP tally for 2023 |
| Cost to compare | Total collected against the amount advanced |
Why a merchant cash advance sits outside the loan category
With a merchant cash advance, a provider buys a share of the business's future receipts at a discount. The business receives a lump sum; the provider collects the purchased amount from future sales, either as a percentage of each day's card receipts or as fixed daily or weekly debits from the bank account. There is no interest rate and no fixed repayment term, because the amount is remitted from sales rather than repaid as a debt.
That structure matters in practice. If sales slow, a true percentage holdback collects less each day and takes longer. If the agreement uses fixed debits instead, ask whether it allows reconciliation when sales fall.
The holdback percentage, and what it takes from each day
The holdback is the share of each day's card or bank receipts that goes to the provider until the purchased amount is collected. A higher holdback clears the advance faster but leaves less cash for the business each day. Ask how the holdback is applied: to card batches only, or to all deposits.
Factor rates on an MCA, and why they are not an APR
A factor rate is the multiplier that sets the total to be collected. Multiply the amount advanced by the factor and you get the purchased amount. It is not an annual percentage rate, and because collection can finish in a few months, the effective cost can be high compared with a loan. Always ask for the dollar total to be collected and the expected daily or weekly amount.
A merchant cash advance example, with invented numbers
A Kingman, AZ diner receives a $10,000 advance. To keep the arithmetic easy, the example uses a factor of 1.5, a round number chosen for illustration, not a typical or expected figure. The provider will collect $15,000 in total, so the cost is $5,000. With a 10% holdback and card sales averaging $1,800 a day, the provider collects about $180 a day, and the $15,000 is reached after roughly 84 days of sales.
If card sales drop to $1,200 a day, collection falls to $120 a day and takes about 125 days. The restaurant funding page compares this with equipment financing and working capital for kitchens.
Does an advance show up on credit reports?
Each provider has its own practice here. Some do not report the advance to business credit bureaus the way a loan is reported, but a provider may check the owner's credit at the start, and a default can still lead to collection activity. Ask the provider directly what it checks, what it reports and to whom.
What is loan stacking, and why does it matter here?
Stacking is layering a fresh advance or loan on top of one still being collected. Each new advance takes another share of the same receipts, so cash available to run the business shrinks quickly. Many agreements prohibit stacking or treat it as a default. If you already have an advance, say so at the start; partners will see it in bank statements anyway.
Reading an advance agreement before signing
- The purchased amount in dollars, and the amount actually deposited after any charges
- Whether collection is a true percentage of receipts or a fixed daily or weekly debit
- Whether the agreement allows reconciliation if sales fall
- Any restrictions on other funding while collection runs
- The default triggers, and the consequences
Compare the total against a loan for the same need before deciding. An advance can make sense for a short, specific cost; it rarely makes sense as a substitute for steady working capital.
When an advance fits, and when something else does
- Can fit: steady daily card sales, a short and specific need, and a plan to finish collection before taking anything else.
- Look elsewhere: a long project, a machine with resale value (see equipment financing), or wages that keep running short.
- Compare: a working capital loan or a credit line before accepting an advance.
Limited-service restaurants, 147 employer establishments in Mohave County, AZ in 2023 (County Business Patterns), and full-service restaurants, 155, are card-heavy businesses that may be offered advances. The six-route comparison, the industry pages, the Kingman, AZ figures and the request steps help put an offer in context.
By Quarrymoor Financial · Updated
