Small business grants vs. Merchant Cash Advance: A review (The latter is better!)

small business grants

Small business loans help business owners to keep up with their everyday expenses in their company, and thus meet their short-term business goals and requirements. These day to day operations may include inventory, renovation, technology upgrades, staff hiring expenses, etc. Moreover, it can also be to make payroll, pay taxes, or just to pay off the existing debts.

No matter what type of small business it is, whether retail, construction, or something else, every firm needs financial backing in order to maintain and grow their businesses. In such a scenario, a small business grant or merchant cash advance comes in handy. However, which is one is better for a small business? Check it out!

Read More: Choosing Wisely: Secured Business Loans or Merchant Cash Advance?

Small business grants

Small business grants allow small business owners to pay their outstanding balances. There are a lot of government agencies out there that offer small business grants to a wide range of enterprises, including environmental conservation, child care services, etc. However, these agencies have an intimidating application process and require plenty of hard work from your side.

Additionally, there are also private agencies that provide small business grants. Some of these corporations provide small business grants to only nonprofit organizations, and a few of them provide it to for-profit firms. However, they have stringent submission guidelines as they appear just once in a year.

When it comes to the working of small business grants, they have many operational guidelines for companies and business money purposes. They focus on equipment purchases, working capital requirements, office expansion or relocation, and real estate deals. This means small business owners cannot use small business grants to pay back their taxes, buy and hold assets, repay an owner, change ownership, buyout competition, and any other such action.

Moreover, small business grants take time to offer money, which is as long as 4 to 6 weeks. They have a long list of restrictions when it comes to their approval. It also checks the credit history and score of the business owner.

Read More: Merchant Cash Advance: The Best Option for Business Lending

Merchant Cash Advance

In a Merchant Cash Advance or MCA, a company receives the necessary cash injection by selling a percentage of its future credit card receipts. MCA has a very straightforward approval process and is very fast as compared to traditional financing options, including small business grants.

Furthermore, a MCA has very few credit requirements as well as operating restrictions for companies. A merchant cash advance does not focus on the business purpose and hence is very flexible. Through merchant cash advance, business owners can access their funds within one week or in some cases even within 72 hours. The loan business owners take relies on the amount of credit card sales they do in a month, their industry type, and the operational duration of their business.


The comparison between small business grants and merchant cash advance certainly shows that the MCA is much better since it does not have any business purpose requirements. Moreover, the approval process for small business grants is much slower and complex than merchant cash advance. Additionally, MCAs do not necessitate any minimum credit score or personal guarantee like collateral.

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