The merchant cash advance market is expected to witness a dramatic growth estimated to reach close to USD 1140 billion by 2028 with a CAGR anticipated at 15.5%. The rapid growth of the market can be attributed to the growing adoption of merchant cash advance across restaurants and retailers along with other industries which are fuelling the demand for highly efficient and reliable merchant cash advance services.
Emergence of SMEs worldwide in need of capital funding or help to strengthen infrastructure is a major factor boosting the growth of the merchant cash advance market. Multiple benefits offered by merchant cash advance services that are aiding in market expansion as compared to regular loan formats are improving user preferences, more critically, small business owners to meet their capital needs with the help of merchant cash advance (MCA) solutions thus escalating the demand. However, high interest rates of merchant cash advance is likely to inhibit growth globally over the forecast timeline. In contrast, as POS terminal adoption are becoming more mainstream with digital transaction systems gaining significance, global merchant cash advance market will encounter new growth opportunities.
Merchant cash advance is a system that offers financing alternatives to conventionally adopted traditional small business loan. Unlike loan, merchant cash advance offers small business owners with an upfront sum of cash in exchange of a determined piece of the business set-up’s future sales. Merchant cash advance repayments offer the customers two means to adopt the system. One wherein a business can secure lump sum upfront or second way is to repay on a set daily or weekly schedule during which the remitted debits are deducted. Merchant cash advance (MCA) is a goof alternative to traditional bank loans particularly for businesses with a higher credit card sales volume who are not eligible for traditional loan. MCA is characterized by many of its advantages such as eliminating the requirement for collateral or strong credit, flat access to cash, customizable choice of use and flexible terms of repayment.
Merchant cash advance market players are placed within a strong competitive environment witnessing surge of new market players entering the market with the goal of replacing the traditionally established financing loan models and instead bringing in advanced modern solutions. The rapidly escalating threat of new players along with growing awareness of merchant cash advance with constant upgradations in the system solutions is expected to strengthen the market considerably.
The major players of the merchant cash advance market are Fundbox, Credibly, American Express Merchant Financing, Fora Financial, PayPal Working Capital, Square Capital, National Funding, Stripe Capital, Lendio, CanCapital, Kabbage, and CAN Capital. The merchant cash advance market comprises market players with varying significance of placement including the firmly positioned local and the well-connected global players. In addition, the aforementioned market players are constantly being challenged by highly innovative breakthroughs and initiatives by new-age competitors aspiring for global inclusion in the competitive landscape of the merchant cash advance market.
Merchant Cash Advance Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2028||USD 1140 billion|
|Growth Rate||CAGR of 15.5% during 2021-2028|
|Segment Covered||Type, Deployment, Applications, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||Fundbox, Credibly, American Express, Fora Financial, PayPal Working Capital, Square Capital, National Funding, Stripe Capital, Lendio, Kabbage, and CAN Capital.|
Key Segments of the Global Merchant Cash Advance Market
Type Overview, 2018-2028 (USD Billion)
- More than $500,000
Deployment Overview, 2018-2028 (USD Billion)
Applications Overview, 2018-2028 (USD Billion)
- Time in Business Less Than 6 Months
- Time in Business 6-12 Months
- Time in Business 12-18 Months
- Time in Business More than 18 Months
Regional Overview, 2018-2028 (USD Billion)
- Rest of Europe
- Rest of Asia Pacific
- Rest of South America
Middle East & Africa
Reasons of the market study
- Main aim of the market study is to provide a comprehensive guide addressing the complexities of the merchant cash advance market imparting you with the most accurate information and latest details of the current events.
- To provide you with action-specific information ensuring you remain competitive amidst the rapidly evolving innovations by key players to sustain competition.
What does the report include?
- The study on the merchant cash advance market delivers conclusive analysis of qualitative factors including the key drivers, restrains and opportunities
- The study also provides a thorough evaluation of the competitive ecosystem housing the existing and potential players in the merchant cash advance market along with their strategic overview highlighting product development initiatives
- The study delivers accurately analysed market segmentation based on type and application with a qualitative and quantitative review. The study prominently assesses key geographies with similar set of data.
- Accurate metrics representing the market sizes and forecasts with respect to each of the mentioned segment have been incorporated.
Who should buy this report?
- The report on the merchant cash advance market is suitable for market participants and industrial players across the banking and finance sector including service providers such as banks and credit card companies
- Venture capitalists, investors, small-scale as well as large-scale business owners and entrepreneurs across varying industries seeking detailed information of the future outlook of the merchant cash advance market
- Analysts, consultants, marketers as well as consumers seeking insights shaping the merchant cash advance market.
Spurring demands for instant cash among businesses coupled with an array of cash advance alternatives along with short-term payback solutions are among the primary driving factors boosting the merchant cash advance market. High-tech technologies along with surged adoption of the same by banks and financial institutions are moderating the rate of for cash advance services. Surging number of small and medium sized businesses particularly across the food and beverage, consumer goods, and retail industry such as the increasing number of restaurants and retail store chains is expected to expand the adoption of merchant cash advance services allowing smaller businessmen and young entrepreneurs jumpstart operations with sufficient capital funding.
Increasing complexities associated with traditional business loan and stern eligibility criterion is fuelling the need for a more comprehensive, easy to apply sourcing process. Merchant cash market is expected to witness exponential growth with an ideal market appeal and growing traction along with deployment of regulations favouring the small business owners to opt for the much easier alternative thus offering lucrative opportunities for the merchant cash advance market growth.
Based on the type of MCA (merchant cash advance), the market is bifurcated based on the range of capital provided such as $5,000-250,000, $250,000-500,000 and more than $500,000. The MCA type segment offering services beyond $500,000 is expected to escalate over the forecast period with increasing expenditure needs of the businesses across different industries. The $5,000-250,000 and $250,000-500,000 segments are also expected to witness significant growth with increasing need for capital aid expressed by the surging SMEs and restaurants or retail stores.
In terms of application, the market is fragmented into varying time-slots in business starting from less than 6 months, from 6-12 months, 12-18 months and lastly more than 18 months. Time in business is a crucial factor in determining the factor that ultimately defines the eligibility. Factor is the specific repayment range that typically depends on the length of time in business. 6-12 months of time in business segment is the most predominant of all as majority of business cash advance transactions are completed within twelve months.
Based on deployment, the market is split into offline and online services. While offline services are adopted by many small business owners, the online merchant cash advance service segment is expected to witness substantial growth over the forecast period owing to the rapid advances in technologies and a strong inclination of industries towards online and digital payments
North America is a relatively larger market with a well-flourished environment for the growth and development of the merchant cash advance market. The region has an enormous landscape of small businesses across majority of industries with trending SMEs. The region has a robust competition with establishment of large merchant cash providers and finance companies adopting innovative strategies to provide efficiency and easy capital sourcing to businesses. U.S. is a prominent country in the region taking extensive steps to improve the services provided to the businesses fuelling the economy. Europe is also expected to grow at remarkable rate over the forecast period owing to the favourable government regulations and rise in adoption of merchant cash advance services by organization to enhance the growth. Asia Pacific is a potential marketspace estimated to experience optimum growth of the merchant cash market with economies like India and China driving small business development.