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founderpath.com · newsletter
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It's Nathan.
Quick note: I'm speaking at SaaSiest this year. The organizers are offering a €100 discount for the Founderpath audience. Will I see you there? Get your ticket here. Reply and LMK.
Now, on to today's topic:
NPR spent months investigating the Merchant Cash Advance (MCA) industry.
The average effective annual cost across traditional MCAs is approximately 94%.
An MCA is a lump sum you receive today, repaid as a percentage of future sales. It's technically not a loan. It's a purchase of future revenue.
That distinction puts MCAs outside most lending regulations.
MCA is one of the fastest ways to get capital. 24 hours from application to wire, no equity.
The question is: which provider should you pick?
3 terms to understand before you sign anything:
1/ Factor rate: the multiplier on your advance.
Traditional providers charge 1.2-1.5x.
A 1.3 factor on $100k means you repay $130k total.
Modern providers go as low as 1.05x = $105k total.
2/ Holdback rate: the percentage of revenue deducted for repayment.
Traditional providers take 10-20% of daily card sales.
Modern providers deduct monthly.
3/ Repayment period.
3-18 months with traditional providers.
Up to 24 months with modern ones.
Who it's built for:
Traditional MCAs were designed for card-heavy businesses: restaurants, retail, and salons.
If your revenue comes through Stripe subscriptions, ACH transfers, or monthly retainers, most traditional providers won't qualify you.
Modern providers evaluate your actual business data:
Recurring revenue, churn, growth rate - instead of card volume.
That opens the door for:
SaaS companies with subscription revenue
E-commerce brands with consistent order volume
Agencies on stable retainer contracts
CPG businesses with seasonal inventory needs
The table below shows very different economics depending on who's offering it.
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Remember the 94 cents per dollar annual cost NPR found?
That number reflects the traditional market, but not all providers operate this way.
So how do you pick the right one?
I broke down 5 contract clauses that answer this in under 5 minutes + a checklist to match the right MCA to your stage.
>> Get my full guide here
My fund offers MCAs built for digital businesses.
Transparent pricing
Monthly repayment
No personal guarantee or equity taken
How it works:
three_steps (1)
>> Get a term sheet in 2 minutes
What's your monthly revenue right now? Reply and I'll tell you which product fits your stage.
Nathan Latka
CEO, Founderpath
PS: Two more ways we can help you grow:
Revenue financing: must have $1-3m revenue. Capital in 24 hours. No equity, no warrants.
Term loans: $3m+ revenue. Interest-only periods. No warrants. 4-year paybacks.
Founders that have grown with life-changing money and our playbooks: https://founderpath.com/blog/category/case-study
P.P.S. Founderpath has wired over $220m to 554+ SaaS companies. What founders are saying:
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Founderpath, 815A Brazos Street, , Austin,TX,78701,USA,(210) 718-8920
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