product
BCA (Business Cash Advance)
A BCA is a purchase of future receivables, the funder advances cash and collects a fixed percentage of daily card or bank deposits until repaid.
Last updated Reviewed by ICG Funding
Definition
What it means.
Legally, a BCA is not a loan. The funder purchases a specified dollar amount of future receivables for a discounted cash amount today. Because the repayment is contingent on revenue, there is no fixed maturity date and, in theory, no right to accelerate if sales drop temporarily.
In practice, BCAs use aggressive daily or weekly holdbacks and are among the highest-cost products in small business funding. Always convert the factor rate and expected term to an effective APR before accepting.
Now what?
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