What is a Merchant Cash Advance?
 

When a small business owner takes out a merchant cash advance (MCA),
they’re given a lump sum of cash, which they repay via a percentage of their
daily credit and debit card sales. Less commonly, you can get an MCA with
terms that include a fixed daily payment based on an estimate of your
monthly revenue. Merchant cash advance companies typically partner with
credit card processors.

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Methods for Paying Back a Merchant Cash Advance

In some cases, the repayment can be handled by your credit card processor,
which deducts the owed funds automatically from your credit card sales
and transfers the agreed-upon daily sales percentage to the MCA company.
 
In the case of a lock box or trust account withholding, credit card sales
go to a bank account controlled by the MCA company. The MCA company
then takes its share of the money and transfers the rest to the business’s
bank account.
 
With ACH withholding, the repayment is made via automatic debit from
the business’s checking account to the MCA company.