My business has enough revenue on paper that an MCA company would probably fund me, but I keep seeing owners say the payment is what killed them. I can make the payment in a normal week, but I am not sure what happens during a slow stretch, bad weather, repairs, or a vendor crunch. How should I test whether the offer is actually survivable?
Do not test the offer against your best or average week. Test it against a bad week. Build a weekly cash-flow model with deposits, food or inventory cost, payroll, rent, taxes, repairs, owner draw, and the proposed MCA payment. Then run a slower-sales scenario. If one bad week forces overdrafts, delayed payroll, or another advance, the payment is too aggressive. MCA offers often look possible because approval is based on deposits, but survival depends on margin and cash cushion. If the deal only works when nothing goes wrong, it is not working capital.