What Is Working Capital and How Do Merchant Cash Advances Work?

What is working capital?

Working capital is the cash available to cover everyday operating expenses, as distinct from money tied up in long-term assets. Healthy working capital lets a business buy inventory, make payroll, run marketing, and absorb seasonal swings without straining. When that cushion runs thin — or when an opportunity needs funding faster than a bank loan allows — businesses look for flexible capital options.

How does a merchant cash advance work?

With an MCA, you receive a lump sum upfront and repay it through an agreed share of your daily or weekly card sales. Because repayment is tied to a percentage of revenue, the amount you pay back rises when sales are strong and eases when they slow. That revenue-linked structure is the defining difference from a fixed-payment term loan, and it's why MCAs appeal to businesses with consistent card volume that want repayment to track their actual sales.

When does a merchant cash advance make sense?

• You have steady card-based revenue. Repayment is tied to card sales, so consistent volume is what makes an MCA work.
• You need capital quickly. MCAs are known for speed relative to traditional bank loans.
• You prefer flexible repayment. Paying back a share of sales — rather than a fixed monthly amount — eases pressure during slower periods.
• You want to fund a near-term need or opportunity. Inventory, equipment, marketing pushes, or bridging a seasonal gap.

When might an MCA not be the right fit?

If your card volume is low or highly irregular, the revenue-linked repayment may not line up well. And as with any financing, you should understand the total cost before committing. The right move is to match the funding type to how your business actually earns — businesses with strong, steady card sales are where an MCA fits most naturally.

How TouchSuite fits

TouchSuite offers access to working capital and merchant cash advances alongside its payment processing and POS — so a business already running card volume through TouchSuite can pursue funding from the same provider rather than starting a separate relationship. That consolidation is convenient for SMBs, including those in high-risk verticals that can struggle to find funding elsewhere.