Asset Based Lending V. Merchant Cash Advance Loans

Asset based lenders (ABL) are focused on collateral (receivables/inventory/equipment) and lend against the value of those assets. Merchant Cash Advance lenders (MCA) focus solely on cash flow and not on what the business can afford to pay. ABL looks at everything and structures its loan in a healthier manner for the business.

MCA loans have a fast pay back, typically being amortized over 6 to 18 months. They’re significantly more expensive than ABL and if your business is growing, this type of loan is not going to help you.

The only real advantage of an MCA loan is that you can get one very quickly; usually within 24 hours. Unfortunately, many struggling companies grab these loans for access to quick cash. The only way these loans could work is if you have a specific project to fund that has significant margins to afford the cost of the loan, but other than that, they’re usually not in the best interest of the business. They can be addictive with the business needing to take out a second MCA loan to pay the first and so on.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at