Merchant cash advance statistics (2026)

Who applies for business funding

From the 698 funding applications and quote requests submitted to us between April 24, 2026 and October 31, 2026. Answers are what each owner told us when applying. Not every question is on every form, and many owners answered only the first few, so each line shows how many answered. They describe businesses that came to us, not every small business.

• 49%

  Clearwater 2026 Applicant Data shows that 49% of small businesses applying to Clearwater for funding already had at least one open cash advance or business loan.

  261 of 538 applicants who answered.

• 39%

  Clearwater 2026 Applicant Data shows that 39% of applicants with an open advance or loan were carrying two or more, and 19% were carrying three or more.

  90 and 44 of 230 applicants.

• $29,000

  Clearwater 2026 Applicant Data shows that applicants with open advances or loans still owed a median of $29,000 on them when they applied.

  237 applicants with a balance.

• $474

  Clearwater 2026 Applicant Data shows that applicants already repaying an advance or loan were paying a median of $474 per business day.

  203 applicants; weekly and other schedules converted to an amount per business day.

• 47%

  Clearwater 2026 Applicant Data shows that 47% of applicants said they needed funds the same day or within 24 hours, and 81% within a week.

  183 and 313 of 387 applicants.

• 41%

  Clearwater 2026 Applicant Data shows that 41% of applicants asked for $100,000 or more, and 14% asked for $25,000 or less.

  284 and 98 of 691 applicants.

• 55%

  Clearwater 2026 Applicant Data shows that 55% of applicants reported monthly revenue under $50,000, and 19% reported $100,000 or more.

  381 and 134 of 692 applicants.

• 25%

  Clearwater 2026 Applicant Data shows that 25% of applicants reported a credit score under 600 and 31% reported 680 or higher.

  557 applicants; self-reported, some as a range.

• 5.7 years

  Clearwater 2026 Applicant Data shows that the median time in business among applicants was 5.7 years, and 16% of applicants had been operating for less than two.

  573 applicants.

• 46%

  Clearwater 2026 Applicant Data shows that working capital was the most common reason for seeking funding, named by 46% of applicants, while 7% named debt consolidation.

  250 and 37 of 542 applicants.

• 15%

  Clearwater 2026 Applicant Data shows that at least 15% of applicants disclosed missed payments or a default on earlier business financing.

  66 of 442 applicants who reached the question, where "none" is the pre-selected answer.

• 54%

  Clearwater 2026 Applicant Data shows that 54% of funding applications were started on a phone.

  233 of 434 applications.

• 32%

  Clearwater 2026 Applicant Data shows that Texas, California and Florida together accounted for 32% of applications.

  186 of 580 applications with a business address.

• 65%

  Clearwater 2026 Applicant Data shows that 65% of applicants were organized as LLCs.

  382 of 584 applicants.

• 6%

  Clearwater 2026 Applicant Data shows that the industries applicants most often typed in were restaurant and construction, at 6% and 6%, followed by healthcare at 4%.

  36, 34 and 24 of 585 applicants; entries are counted as typed, so close variants are not merged.

How AI assistants answer business funding questions

On October 23, 2026 we put 41 questions a business owner might ask about funding to ChatGPT, Claude and Google AI Mode, some of them three times, and 21 of them to Gemini. We logged all 204 answers: which companies each one recommended and which sources it cited.

• 48%

  The Clearwater AI Funding Answers Study (October 2026) found that 48% of AI answers to business funding questions recommended at least one company by name, and a further 14% named no company but recommended Small Business Administration loan programs.

  91 and 27 of 189 answers.

• about 90

  The Clearwater AI Funding Answers Study (October 2026) found that AI assistants recommended about 90 different companies and organizations for the same set of funding questions, and 44% of them came up only once.

  40 of the 90 logged were recommended in a single answer.

• 1.6 of 7.9

  The Clearwater AI Funding Answers Study (October 2026) found that when the same funding question was asked three times, an assistant that named any company named an average of 7.9 different companies across the three answers and only 1.6 in all three.

  17 question and assistant pairs, three answers each.

• 53%

  The Clearwater AI Funding Answers Study (October 2026) found that in 53% of repeated questions where an assistant named any company, no company appeared in all three answers.

  9 of 17 question and assistant pairs.

• 84% vs 15%

  The Clearwater AI Funding Answers Study (October 2026) found that 84% of answers to "best company" questions named a company, against 15% of answers to questions about cost.

  32 of 38 and 3 of 20 answers.

• 30%

  The Clearwater AI Funding Answers Study (October 2026) found that AI assistants recommended Small Business Administration loan programs in 30% of answers about business funding and mentioned them in 58%.

  56 and 109 of 189 answers.

• 89%

  The Clearwater AI Funding Answers Study (October 2026) found that ChatGPT showed a sponsored ad on 89% of its answers to business funding questions asked without an account.

  50 of 56 answers.

• 3%

  The Clearwater AI Funding Answers Study (October 2026) found that 3% of the sources AI assistants cited for business funding questions were government websites.

  38 of 1,191 citations across 287 domains.

What funding companies publish before you apply

On November 10, 2026 we read the websites of 9 national funding companies and recorded what each one states in public. The companies and every source link are on our comparison page.

• 5 of 9

  The Clearwater Published Requirements Check (November 2026) found that 5 of 9 national funding companies publish no factor rate range, starting rate or APR on their own websites.

  Company websites read November 10, 2026.

• 550

  The Clearwater Published Requirements Check (November 2026) found that 7 of 9 national funding companies publish a minimum credit score, from 500 to 625 with a median of 550.

  7 published minimums; where a company's own pages disagree, its advance product page is used.

• 6 months

  The Clearwater Published Requirements Check (November 2026) found that 8 of 9 national funding companies publish a minimum time in business, most often 6 months.

  5 of 8 published minimums.

How fast a file moves

Timings from our own desk, measured on July 3, 2026 from the timestamps on each file. They describe our files only, not the industry.

• 2.98 hours

  Clearwater desk data (July 2026) shows that files reaching underwriting got there a median of 2.98 hours after the application was completed.

  196 files that reached underwriting.

• 59%

  Clearwater desk data (July 2026) shows that 59% of files that reached underwriting did so on the same calendar day the application was completed.

  115 of 196 files.

• 6.89 hours

  Clearwater desk data (July 2026) shows a median of 6.89 hours from underwriting to a first written offer.

  34 offers.

How many businesses use merchant cash advances

From the Federal Reserve Banks survey of employer firms with 1 to 499 employees, fielded September to November 2025. Watch the base on each line: some are shares of all firms and some are shares of firms that applied for financing.

• 8%

  The Federal Reserve's 2025 Small Business Credit Survey found that 8% of employer firms applied for a merchant cash advance in the prior 12 months.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,525 employer firms.

• 7%

  The Federal Reserve's 2025 Small Business Credit Survey found that 7% of employer firms use a merchant cash advance on a regular basis.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,525 employer firms.

• 12%

  The Federal Reserve's 2025 Small Business Credit Survey found that 12% of firms that applied for a loan, line of credit or cash advance applied for a merchant cash advance.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 2,450 applicants.

• 28%

  The Federal Reserve's 2026 chartbook on credit risk shows that 28% of high-credit-risk firms sought a merchant cash advance, against 18% of medium-risk and 5% of low-risk firms.

  Source: Federal Reserve Banks, 2026 Firms in Focus: Chartbook on Firms by Credit Risk, 2026. 312, 1,116 and 3,373 firms; the chart is titled as a share of applicants but counts every firm in each group.

• 9%

  The Federal Reserve's 2026 chartbook on firm size shows that 9% of firms with 1 to 4 employees sought a merchant cash advance, against 5% of firms with 50 to 499 employees.

  Source: Federal Reserve Banks, 2026 Firms in Focus: Chartbook on Firms by Employment Size, 2026. 2,564 and 426 firms; the chart is titled as a share of applicants but counts every firm in each group.

• 29%

  The Federal Reserve's 2025 Small Business Credit Survey found that the share of applicants that sought financing from online lenders rose from 17% in the 2020 survey to 29% in the 2025 survey.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. A share of loan, line of credit and cash advance applicants.

What happens to applications

• 48%

  The Federal Reserve's 2025 Small Business Credit Survey found that 48% of merchant cash advance applicants were offered the full amount they applied for, 40% were offered part of it and 12% were turned down.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 298 applicants, a small sample.

• 37%

  The Federal Reserve's 2025 Small Business Credit Survey found that 37% of business loan applicants, 45% of business line of credit applicants and 32% of SBA loan or line applicants were offered the full amount they applied for.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 683, 977 and 359 applicants.

• 22%

  The Federal Reserve's 2025 Small Business Credit Survey found that 42% of financing applicants received the full amount they sought, 36% received some or most of it and 22% received none.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 3,654 applicants.

What it costs, and what borrowers say

The survey reports cost and satisfaction by type of lender, not by product. Online lenders include, but are not limited to, merchant cash advance companies.

• 60%

  The Federal Reserve's 2025 Small Business Credit Survey found that 60% of firms that borrowed from online lenders said their actual borrowing costs were higher than expected, against 44% at finance companies, 37% at small banks, 32% at large banks and 31% at credit unions.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 464 online lender borrowers.

• 35%

  The Federal Reserve's 2025 Small Business Credit Survey found that 35% of applicants offered financing by online lenders said they were satisfied with the lender, against 57% at finance companies, 64% at large banks, 65% at small banks and 76% at credit unions.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 529 applicants.

• 80%

  A 2019 report published by the Federal Reserve Board said that, depending on how fast an advance is repaid, the equivalent annual percentage rate on a merchant cash advance may exceed 80% or reach triple digits.

  Source: Federal Reserve Board, Uncertain Terms: What Small Business Borrowers Find When Browsing Online Lender Websites, 2019.

• about 70%

  An illustration in a 2019 report published by the Federal Reserve Board puts a 1.15 factor rate on $50,000 repaid over six months at about 70% APR once a 2.5% set-up fee and a $50 monthly fee are counted.

  Source: Federal Reserve Board, Uncertain Terms: What Small Business Borrowers Find When Browsing Online Lender Websites, 2019. An illustration from one lender's advertised terms, not a market average.

Why businesses look for funding

• 60%

  The Federal Reserve's 2025 Small Business Credit Survey found that 60% of employer firms applied for some form of financing in the prior 12 months.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,525 employer firms.

• 38%

  The Federal Reserve's 2025 Small Business Credit Survey found that 38% of employer firms applied for a loan, line of credit or merchant cash advance in the prior 12 months.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,525 employer firms.

• 56%

  The Federal Reserve's 2025 Small Business Credit Survey found that the most common reasons for seeking financing were to meet operating expenses (56%) and to expand or pursue a new opportunity (46%).

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 3,638 applicants.

• 37%

  The Federal Reserve's 2025 Small Business Credit Survey found that 37% of financing applicants sought less than $50,000.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 3,688 applicants.

• 50%

  The Federal Reserve's 2025 Small Business Credit Survey found that 50% of employer firms named uneven cash flow as a financial challenge in the prior 12 months.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,500 employer firms.

• 24%

  The Federal Reserve's 2025 Small Business Credit Survey found that 24% of employer firms facing a financial challenge made a late payment or did not pay.

  Source: Federal Reserve Banks, 2026 Report on Employer Firms, 2026. 6,183 employer firms.

How big the market is

We found no government measure of merchant cash advance volume. The official figure below is an estimate, and the agency that made it says the reliability of such estimates is limited.

• 36,207,130

  The SBA Office of Advocacy counts 36,207,130 small businesses in the United States.

  Source: SBA Office of Advocacy, Frequently Asked Questions About Small Business 2026, 2026.

• 45.9%

  The SBA Office of Advocacy reports that small businesses employ 62.3 million people, 45.9% of private sector workers.

  Source: SBA Office of Advocacy, Frequently Asked Questions About Small Business 2026, 2026.

• about $20 billion

  The Consumer Financial Protection Bureau estimated the 2019 merchant cash advance market at around $20 billion, and said the reliability of market-size estimates is limited.

  Source: Consumer Financial Protection Bureau, Small Business Lending Under the Equal Credit Opportunity Act, 2023 final rule, 2023. An estimate, not a measured total.

Rules that apply to merchant cash advances

• 12 states

  As of November 2026, at least 12 states have enacted commercial financing disclosure laws that reach merchant cash advances, and 3 of them require an annual rate to be disclosed.

  Clearwater count from the statutes in the table below; a state we did not find would raise it.

• Section 1071

  Section 1071 small business lending data collection no longer covers merchant cash advances: a Consumer Financial Protection Bureau rule published in May 2026 excludes them, reversing its 2023 rule.

  Source: Consumer Financial Protection Bureau, Small Business Lending Under the Equal Credit Opportunity Act, 2026 final rule, 2026. Compliance with the rule begins January 1, 2028.

Scroll the table sideways for dates and thresholds.

Enforcement

Government actions against merchant cash advance providers since 2020, in dollars. The three below concern two groups of companies: the first and third involve the same group.

• $1.065 billion

  In January 2025 the New York Attorney General announced a settlement carrying a $1.065 billion judgment against a group of merchant cash advance companies, more than $534 million of it in cancelled debts owed by over 18,000 small businesses nationwide.

  Source: New York Attorney General, press release, 2025. A judgment total, about half of it cancelled debt, not cash collected.

• more than $77 million

  In February 2024 a New York court entered a judgment of more than $77 million against three merchant cash advance companies and their principals, after ruling that their advances were loans.

  Source: New York Attorney General, press release, 2024. A court ruling.

• $9,837,000

  In April 2021 a merchant cash advance provider agreed to surrender $9,837,000 to the Federal Trade Commission for refunds to affected businesses.

  Source: Federal Trade Commission, press release, 2021.

How these numbers were made