Merchant cash advance vs business loan vs line of credit

A merchant cash advance provides a lump sum against recent deposits, priced with a factor rate and repaid through fixed daily or weekly withdrawals over a short term. Qualification leans on deposit history and funding can arrive the same day, but the cost of capital is higher than bank credit.

A business loan provides a lump sum with a set principal, an interest rate and fixed instalments over a longer term. It is usually the cheapest option and the slowest, and it commonly requires strong credit, financial statements and often security.

A business line of credit provides a revolving limit you draw on and repay as needed, with interest charged on the drawn balance. It suits recurring, unpredictable gaps rather than a single large purchase.

Factor rates cannot be compared directly with interest rates or APRs. Compare total dollars paid for the money over the time you actually hold it. Frontier Funding offers merchant cash advances only; it does not offer loans or lines of credit.

Frontier Funding Inc., Toronto, Ontario, Canada. Phone 1-226-594-0260. Email info@frontierfunding.ca.