Grow your Business

Finance your Business

Run your Business

Customer Stories

Tools and Resources

Partner Stories

At the recent Web Summit in Lisbon, Pipe CEO Luke Voiles and Hiroki Takeuchi, CEO of GoCardless, shared their thoughts on the evolving world of embedded finance. In this Q&A session, they discuss what embedded finance means, how it’s transforming businesses, and their vision for the future of financial technology.

[You can also scroll to the bottom of this post to watch the video of the full conversation]

Q: What does embedded finance mean to you, and how has it developed at your respective companies?

I think embedded finance, as a term, is something that means a lot of different things to different people. For us, the concept of financial services being embedded into people's day-to-day lives is really where we started. When we first started 

, we actually initially launched the product with a partner. One of the things we quickly realized was that businesses didn’t want to think about payments on their own. They wanted it to be embedded in the software or processes they were already running daily.

One of the things that's always driven a big part of our success has been partnering with software providers to serve payments within the processes and experiences they are having on a day-to-day basis. Whether that’s sending a customer an invoice or signing up a customer to a new subscription, being embedded into that process has been key.

 to enable our merchants to get easier access to capital, which is another form of embedding financial services. Partnerships are a key part of what embedded finance means to me.

My focus has been on small businesses for almost 10 years. Looking at small business pain points, the number one is always access to capital. Payments is one of the early leaders in embedded finance. I was at Intuit for a long time—about five years—and then I went to Square. Watching Intuit embed features like allowing customers to send invoices and get paid, we launched QuickBooks Capital, which now does $2.4 billion annually in loan volume to QuickBooks customers.

Companies like GoCardless enable instant bank-to-bank money movement for small businesses. Historically, lending was detached from the system—think OnDeck, Bluevine, or Funding Circle. Now, with truly embedded offerings, GoCardless can send anonymized data, allowing us to pre-approve customer bases. In just a few clicks, businesses can access capital, solving the number one pain point with a seamless experience and high customer satisfaction.

When we talk about embedding financial services, we’re solving big challenges like access to capital. Oftentimes, businesses aren’t even aware of what they can access. Historically, going to a bank was onerous, and many banks aren’t set up to cater to small businesses. The partnership between GoCardless and Pipe makes it easy. Pre-approved offers are surfaced within a merchant’s daily process, providing seamless, timely access to financial tools.

Yes, and it’s about reducing friction while staying compliant. Banks and traditional financial systems struggle to integrate seamlessly. Meanwhile, modern fintech platforms, through partnerships, offer near-instantaneous onboarding and access to services. Our focus at Pipe has always been to embed solutions where users naturally need them, enhancing efficiency and driving adoption.

Q: What are the key factors driving the implementation of embedded finance solutions?

Yeah, for us, as I mentioned earlier, payments aren’t something businesses think of as a standalone process—they’re part of a wider workflow. Our focus has always been on embedding payments as deeply as possible into how businesses already operate, making the experience seamless.

When it comes to our partnership with Pipe, it’s a bit different. We have about 100,000 small businesses using our platform. They love working with us because we help improve their cash flow, reduce late payments, and minimize the time and effort spent on admin. These are key problems we solve for them.

But, as Luke mentioned, access to capital remains a huge challenge for small businesses. Often, it’s not just about the ability to access capital but also about awareness. Many small businesses don’t realize what they’re eligible for. If they’re used to dealing with banks, it’s often a slow and cumbersome process.

The partnership with Pipe has been powerful because we can pre-approve businesses and surface their options directly within their workflow. For example, a business owner checking their customer payments or planning their cash flow can see a pre-approved offer to access capital with just a few clicks. It’s seamless and integrated into their daily operations, which is incredibly powerful.

I completely agree. What’s fascinating is how these integrations solve pain points. For instance, one of our partners serves vertical SaaS businesses for nail salons and hair salons. Another serves service-based businesses like electricians and plumbers.

When thinking about embedding solutions, we ask: What tasks are these customers completing daily in their software? For nail salons, it might be managing appointments, payments, or inventory. That’s when you look at where the need for capital arises—whether it’s paying payroll, covering a bill, or buying equipment. The idea is to present a pre-approved offer at that exact moment of need.

It creates a security blanket for small businesses. They know that access to capital is just a click away whenever they need it. This requires analyzing customer behavior and understanding their workflows. Sometimes, we even help our partners better understand their customer behavior through data analytics and tracking.

Q: How do you see trust in digital financial services evolving?

Trust has come a long way. When we started GoCardless in 2011, businesses were skeptical of online financial providers. They preferred the familiarity of a physical bank branch. But over time, as digital platforms proved their reliability, that perception shifted.

Today, merchants are not only comfortable using digital services but are also open to recommendations from one digital provider to another. This trust in interconnected digital ecosystems has been a game-changer, enabling seamless partnerships like ours with Pipe.

Q: How do differences in regulation and customer behavior impact the implementation of embedded finance solutions across geos?

Regulation plays a foundational role in fintech. While merchants may not see it as part of the value proposition, compliance is critical to enabling the service. For example, onboarding processes need to be seamless while meeting strict regulatory requirements.

Operating globally adds layers of complexity. For instance, you have to navigate regulations from UK regulators, European regulators, and even state-by-state regulations in the US. Solving these challenges in a compliant way while offering a great user experience is a competitive advantage in fintech.

Hiroki’s right. To expand internationally, fintech companies need a modular approach. For example, at Pipe, we use GoCardless as a backend partner for money movement. This eliminates the need to integrate directly with banks in multiple countries.

We’ve built an orchestration layer for onboarding and compliance. This allowed us to launch in the UK just six weeks after starting in the US. By swapping in local datasets and adapting to specific AML (Anti-Money Laundering) rules, we can scale quickly. It’s about being smart with modular systems and relying on trusted local partners to handle the complexities of reconciliation and compliance.

Q: How do you see embedded finance, user experience, and technology evolving?

Embedded finance is about making financial services available in the moment—whether on desktop software or augmented reality. The key is surfacing solutions when and where they’re needed. For example, when a business decides to invest in new equipment, having pre-approved financing embedded directly into that process makes a world of difference.

We’re still in the early stages of this trend, and there’s so much potential for growth.

I see two big trends: better data and changing interfaces.

On the data side, fintech has evolved from relying on tax returns and audited financial statements to leveraging real-time transaction data. With Pipe, we work with perfect cash flow data streams, allowing us to automate credit decisions 100%. As datasets become more comprehensive, risk-taking will improve significantly.

On the interface side, we’ve moved from paper statements to PDFs to dashboards in software like Square or QuickBooks. The future is about automating tasks entirely. AI agents, for example, could handle everything from booking appointments to taking payments automatically. This would free up time for small business owners to focus on their families and their passions.

Embedded finance is transforming how businesses access and use financial services. Technology allows for fast, seamless delivery, and partnership between platforms puts access at the point of need, even across the globe. 

Here's the full discussion between Luke and Hiroki from Web Summit Lisbon, November 2024:

Luke Voiles and Hiroki Takeuchi discuss the evolution of embedded finance solutions and their impact on capital access for small businesses.

See the key takeaways from Luke Voiles and Hiroki Takeuchi's discussion on the future of embedded finance and watch the video of the full conversation. 

Exploring the future of embedded finance: Insights from Luke Voiles and Hiroki Takeuchi at Web Summit

Pipe

When it comes to funding growth for small businesses, there are a few different options. Let’s take a look at two popular alternatives, Pipe Capital and traditional loans (also known as term loans), to see how they compare for small businesses:  

No. Pipe isn’t a lender and Pipe Capital is not a loan.

Pipe Capital offers a fast, frictionless alternative to loans with a cash advance built into the software tools SMBs use every day. By leveraging anonymized transaction data, Pipe makes working capital available to a wide range of small businesses, including many that aren’t able to access traditional lending. 

Now we’ll take a closer look at both options and see how they compare.

Lending was the primary financing model for thousands of years, which is why the term “loan” is often a catch-all used for getting outside funds.

In the simplest terms, small business loans involve borrowing money (the principal) with an obligation to repay the loan along with interest, typically in fixed monthly payments. While these payments are very predictable, small business revenue, unfortunately, often isn’t. 

There are several potential downsides to loans for SMBs. First, as mentioned above, the fixed payment schedule can lead to problems if your revenue has seasonality or other fluctuations. For smaller businesses, loans can also be very difficult to secure, as underwriting models aren’t always designed to fit how those businesses operate. And speaking of secure, traditional loans are typically 

 which means the loan is tied to collateral, like equipment or real estate, which can be put at risk if you’re unable to repay the loan. 

Traditional lending is also based heavily on credit scores, which have been shown to carry inherent bias, often making it much harder for women- and 

 to access the capital they deserve. Unfortunately, while the term “loan” has become ubiquitous, 

 showed that only ~14% of small businesses had access to working capital through their bank. 

Now let’s look at Pipe’s solution to the challenges of traditional loans.

How does Pipe Capital compare to loans, in terms of interest?

When you take out a loan, you repay the principal amount you borrowed, possibly an origination fee (2-5% of the loan amount is common), and interest which accumulates until the loan is paid off. The longer it takes to repay, the more interest you accrue, whether that’s a function of a longer repayment term or some option from the lender to pay more slowly due to hardship. 

Since Pipe Capital isn’t a loan, there’s no interest and no origination fee. When a business requests an advance from Pipe, they get a transparent view of exactly how much they’ll pay — the amount advanced, plus a one-time, flat fee. Unlike an origination fee, the one-time capital fee is added to the total and paid over time, representing the total cost of capital. And, unlike interest, this fee never increases, even if it takes longer than expected to pay your advance amount. 

Pipe Capital was designed for business builders, as a way to deliver fast, flexible capital access embedded in the software they use every day. Unlike loans, it’s a cash advance, meaning small businesses can advance a portion of their future revenue for up-front capital when they need it.

Pipe Capital powers capital solutions through software partners

, businesses can be pre-qualified or pre-approved before they even seek financing. Rather than depending on credit scores and lengthy applications, our underwriting is based on live anonymized transactions, which allows us to assess the health of a small business from just a few months of history. A few simple compliance checks are typically all that’s needed, and once approved business owners can have funds in their bank account in 1-2 business days, depending on their bank’s policies. 

Our underwriting models can also be tailored to a specific industry to reflect a better understanding of how those businesses operate. All this enables Pipe to provide capital access to many businesses underserved by traditional lending. 

As an advance, our payments automatically flex with the revenue of the business, preventing them from being caught with a large, fixed payment during a month with lower revenue. 

Pipe Capital was designed for small and mid-sized businesses, all the way down to microbusinesses and even sole props. While many of these smaller businesses struggle to obtain loans,

 makes it possible to advance their revenue with Pipe Capital.  

. By partnering with Pipe, you can seamlessly embed Pipe Capital into vertical SaaS, payfacs, and other software platforms that processes card payments for B2B customers. Our capital offering is fully themeable to feel native to your platform, and we have three integration options to choose from, so you can launch in as little as a few weeks or build a deeper custom integration.

When it comes to accessing capital, small businesses face a range of challenges, especially with traditional loans that can be rigid, slow, and inaccessible to many. Pipe Capital offers a modern alternative, designed specifically to meet the needs of today’s SMBs. By advancing future revenue without requiring collateral, personal guarantees, Pipe delivers a flexible and frictionless financing solution that adapts to your business’s cash flow.

Whether you’re an SMB looking for fast, reliable access to working capital or a software company aiming to provide embedded financial services to your customers, Pipe Capital is a game-changer. It’s not a loan—it’s a smarter, simpler way to fund growth without the constraints of traditional lending. With Pipe, you can focus on what matters most: running and growing your business.

This post was originally published in November 2021 and updated in February 2025.

See how Pipe Capital is different from loans and how both work for funding small business growth.

Traditional bank loans may be the right fit for your company. See how Pipe compares to loans and which is the best embedded option for your platform. 

Is Pipe a loan? See how Pipe compares to loans and which is right for you

Is Pipe a loan?

Pipe's cash advance model creates several advantages for SMBs, including simplicity, flexibility, and speed. Here’s a closer look at Pipe Capital, how it differs from traditional MCAs, and what it means for business owners and embedded partners.

Our cash advance structure allows for agility and speed, launching faster than a typical traditional loan product. Pipe Capital is built with speed and convenience in mind for both our embedded partners and the small businesses that access capital through their platforms.

One of the major hurdles in traditional small business financing is the lengthy applications and extended waiting periods. Because Pipe Capital underwrites SMBs based on secure, live transaction data, we can streamline the process down to a few simple steps, utilizing data that already exists on the partner platform. The result? Partners can launch in as little as a few weeks, and business owners can access capital in days. 

Merchant-friendly funding for safer growth

We believe companies in the financial industry have an obligation to build proactive policies into their products and protect their customers, whether it’s legally mandated or not. While we’re not a lender, Pipe Capital complies with federal fair lending laws, state disclosure laws, and the full KYB/sanctions regime. Our program maintains robust protection for SMBs, helping our partners deliver high customer satisfaction. This also allows us to keep the cost of capital down, by minimizing risks, making the program more attractive to our capital markets partners. 

In the past, many small business owners have put their business 

 assets at risk, in an effort to secure the funding they needed to grow. At Pipe, we never require personal guarantees from business owners and do not have “confessions of judgment” and other abusive contractual terms some have used to seize assets or freeze accounts with little recourse for the business owner. 

We also work to protect against dangers like stacking by issuing only one advance at a time and monitoring for outstanding financing from another provider at onboarding. Our goal is always to help SMBs access the capital they need, as quickly and sustainably as possible.  

Payments that flex with changes in revenue 

Some MCA providers have given the product a bad name in the past by taking advantage of the flexible MCA payment schedule, with accelerated payments for any contract infraction, which resulted in effective APRs in the hundreds. This is why we’ve worked hard to prevent excessive APRs and have built a product that goes out of its way to help preserve the customers’ cash flow. 

Pipe Capital payments decrease with dips in revenue, with no monthly minimum, protecting SMBs during slow times. With one flat, transparent fee (paid over the life of the advance) there are no surprises, and our hold rates (the portion of the customer’s revenue held back to pay their MCA) are lower than many alternatives—15% or below—preserving cash flow for businesses.  

A cash advance product that equals more capital access

Small business owners and the software companies that serve them often compare the benefits of cash advance products with traditional loans. While there are pros and cons to both, our advance structure makes it possible to give capital access to more SMBs when they need it. 

The primary advantage of traditional term loans is that they can be less expensive overall, often because they’re securitized and offered only to the lowest-risk population of prospective borrowers. Unfortunately, many factors can place immigrant-, minority-, and women-owned businesses in the “higher-risk” categories, locking them out of the financial access they need to grow their businesses to their full potential. 

For example, Black-owned businesses were denied loans nearly twice as often as white business owners, according to  Federal Reserve statistics.

 Women-owned businesses also have a harder time being approved for loans, even when their businesses are comparable to their male-owned counterparts.

Unlike traditional financing options based primarily on credit scores and lengthy business histories—which often disproportionately exclude these underserved populations—Pipe’s Capital advance is based on anonymized live revenue data, giving a real-time picture of the health of a business with as little as 3-6 months of history. This allows smaller and younger businesses—many of which are women-, minority-, and immigrant-owned—better access to working capital.

Pipe is underwriting the future of small business with an evolved cash advance model that allows simple,  unbiased financial access to be seamlessly integrated into the tools SMBs use every day. 

https://www.commerce.gov/news/fact-sheets/2024/06/fact-sheet-us-department-commerce-support-minority-business-enterprises

https://www.federalreserve.gov/publications/2021-november-consumer-community-context.htm

See how Pipe's evolved cash advance model is creating more capital access for small business owners across industries.

See how Pipe's evolved MCA model is creating more capital access for businesses across industries.

Pipe Capital: A merchant-friendly MCA model built to improve capital access for SMBs

Pipe Capital: A merchant-friendly cash advance model built to improve capital access for SMBs

Pipe Capital: A customer-friendly MCA model built to improve capital access for SMBs

Business owners frequently find themselves in need of fast and accessible financing. Whether it's restocking inventory, launching a marketing campaign, or investing in cost-saving equipment, it’s often essential to access capital outside of your regular cash flow.

However, getting funds through traditional means like 

 can be a slow and challenging process. This is where a merchant cash advance comes to the rescue. Think of it as a fast way to refuel your business without the long waits that often come with traditional small business loans.

In this article, we'll dive into what a merchant cash advance is, its benefits for businesses, how it compares to traditional loans, and how to decide if it's the right choice for your business. (

For a closer look at Pipe's unique approach to MCAs, head here.

Understanding the basics of a merchant cash advance

A merchant cash advance is a financial arrangement that provides businesses with a 

 in exchange for a predetermined percentage of their future sales.

Unlike traditional loans, payments on an MCA are flexible and directly tied to daily sales, making them suitable for businesses with fluctuating revenue. This alternative funding option is designed to offer quick and flexible access to capital, particularly for businesses that may face challenges qualifying for traditional bank loans.

Here's a breakdown of how a merchant cash advance works:

This continues until the advance and any associated fees are fully repaid. Usually, this lasts anywhere from 3 to 18 months. This flexibility can be particularly beneficial for businesses with fluctuating sales volumes, as their payments will align with their revenue stream.

Funders determine rates for merchant cash advances (MCAs) based on various factors, and the process can vary from one funder to another. Here's a simplified overview of how funders might determine their rates:

The size of the advance can also affect rates. Larger advances may come with lower rates because they generate more revenue for the funder.

The rate is typically expressed as a decimal or percentage, and it represents the total amount to be paid back. To understand the cost of an MCA, multiply the factor rate by the advance amount. For example, if you receive a $50,000 MCA with a factor rate of 1.3, you'll pay a total of $65,000.

The benefits of a merchant cash advance for your business

A merchant cash advance provides several distinct advantages for businesses, particularly when compared to traditional bank loans.

One of the primary advantages of a merchant cash advance is the speed at which businesses can access the funds they need.

MCA funders understand the urgency of business needs, and they often deliver funds in a remarkably short time frame. Think hours or days, not weeks or months. Traditional bank loans, on the other hand, often involve a lengthy and cumbersome application process, with paperwork, credit checks, and extensive reviews that can drag on for ages.

In contrast, applying for a merchant cash advance is relatively quick and straightforward, with many funders offering online application processes.

With MCA's quick access to capital, businesses can take advantage of growth opportunities as they arise.  If you own a retail business, for instance, and you suddenly experience a surge in demand for your products, your business can quickly acquire additional inventory to meet the increased demand, ensuring that you don’t miss out on potential sales.

Moreover, immediate access to capital can also help businesses navigate unexpected expenses or emergencies.  Life in business is full of surprises, and not all of them are pleasant. When unexpected expenses crop up, an MCA can be a lifesaver.

Whether it's repairing a crucial piece of equipment or covering unexpected bills, having quick access to funds can prevent disruptions to daily operations and maintain business continuity.

Another significant benefit of opting for a Merchant Cash Advance is the flexibility it brings to the table when it comes to payment. Instead of locking you into a set monthly amount, MCA connects payments to a percentage of your daily sales. 

This setup allows businesses to navigate periods of lower revenue without the added burden of fixed monthly installments, helping them effectively manage their cash flow. 

This flexibility is invaluable, especially during challenging times like seasonal downturns or economic uncertainties. In such situations, businesses may experience temporary declines in sales. Flexible payment provides breathing room and allows companies to rebound without the heavy weight of inflexible payment schedules.

The adaptable payment terms also cater to businesses with fluctuating revenue patterns. For those facing peaks and valleys in their sales, a merchant cash advance provides access to capital without worrying about a fixed payment schedule putting a pinch on their cash flow.

Again, most traditional banks require you to provide collateral, such as real estate or valuable assets, as security for traditional loans. Of course, this bar often poses a significant barrier for businesses that lack substantial assets to pledge.

merchant cash advance is typically unsecured

. This means that it eliminates the need for businesses to provide collateral, because the capital is funded based on your ability to pay the advance, and not on your assets. 

The absence of collateral makes it a viable funding option for a broader range of businesses, particularly startups and small businesses that might not possess the necessary assets to secure a traditional loan. 

Merchant cash advances typically don’t come with restrictions on how businesses can use the funds, so long as they’re used for business purposes. This flexibility allows businesses to allocate the capital where it's needed most, whether for inventory replenishment, marketing initiatives, equipment upgrades, expansion plans, or any other operational requirements. This freedom in fund utilization supports businesses in pursuing their specific growth strategies.

Merchant cash advances often have higher approval rates compared to traditional loans. The evaluation process often focuses on a business's daily credit card sales and less on credit history, making it a viable option for businesses with less-than-perfect credit or shorter operating histories.

Comparing merchant cash advances with traditional business loans

Merchant cash advances and traditional business loans are two distinct financing options available to businesses. Each has its own characteristics, advantages, and drawbacks. Here's a comparative analysis to help you make an informed choice between the two:

Is a Merchant Cash Advance Right for Your Business?

 You may be tempted to ask which financing method works best. 

As you may have noticed, there’s no one-size-fits-all answer. When deciding between an MCA and a traditional loan, think about your business's specific needs, financial situation, and long-term goals.

Should you get a merchant cash advance for your business?

Now that you know about merchant cash advances and their benefits, it's important to decide if it's 

 for your business. Here are two main things to think about:

By thinking carefully about these two factors, you can make an informed decision about whether a merchant cash advance is the right fit for your business.

Typical merchant cash advances come with all the pros and cons we’ve just talked about. A revenue advance from Pipe is one of the most merchant-friendly options for accessing capital quickly and easily. Pipe advances are based purely on the health of the business, measured in real time with secure live data connections. This allows business owners to access the capital they deserve while staying focused on running the business, not on lengthy applications. 

You pay back your advance with a portion of daily revenue, so payments flex with your cash flow. 

To find out if Pipe’s fast, frictionless capital is right for you, you can 

Learn the ins and outs of merchant cash advances and how they can help small and medium-sized businesses better manage cash flow and grow.

Learn the ins and outs of merchant cash advances and how they can help small and medium-sized businesses better manage cash flow and grow on their terms.

What is a Merchant Cash Advance and How Can It Help SMBs?

What is a Merchant Cash Advance and How Can It Help Small and Medium Businesses?

In small and medium-sized business (SMB) financing, 

 (MCAs) have emerged as a popular alternative to traditional lending options. However, MCAs are evolving, and staying on top of emerging trends is crucial for both funders and SMB owners seeking financing solutions. 

In this article, we will explore the mechanics of merchant cash advances, examine their role in 

, and delve into some of the key challenges they present to business owners. We’ll also discuss the emerging trends in this market, explore potential growth areas for merchant cash advances, and analyze the impact of economic shifts on this financing option. 

Finally, we will provide strategies for SMBs to adapt to the changing landscape and evaluate whether or not a merchant cash advance is the right fit for their business. 

Merchant cash advances are a form of financing that provide up-front capital to SMBs in exchange for a percentage of their future sales. Delivered as a lump-sum amount to the business operating account, MCA funding is a fast solution for businesses where cash flow is tight or bank financing is not an option.  

, which are paid in fixed installments, MCAs are paid back through deductions from a business’s daily receivables, mainly credit and debit card sales. With typical advances ranging from $5,000 to $200,000, this alternative form of funding has been a go-to solution for business owners for roughly two decades, perhaps owing to its flexible payment structure in which payment amounts fluctuate with sales.

Merchant cash advances have become increasingly popular among SMBs due to their accessibility and speedy approval process. Unlike traditional lenders, MCA providers don’t force business owners to jump through hoops like heavy paperwork, 

, and other challenges, instead making funding accessible to a broader range of businesses. 

Moreover, MCAs are much faster than traditional loans. Same-day approvals are common, with funds being delivered to a bank account in as little as a day. This speed can be critical for SMBs facing urgent needs, such as when a piece of equipment breaks down or they need to supplement their inventory during a busy season.

The popularity of merchant cash advances has been steadily increasing in recent years, primarily due to the accessibility factor. Many small businesses find it challenging to qualify for bank loans due to issues such as a limited credit history, lack of collateral, or seasonal revenue streams. MCAs offer an 

 option that addresses these sensitive needs, making them an attractive choice for many SMB owners.

While merchant cash advances offer benefits to SMBs, they typically come at a higher cost. The fees and interest rates of MCAs can be higher compared to traditional loans, while payment periods can be shorter

which can mean higher payments and smaller funding limits for business owners. 

Additionally, if the MCA program is structured incorrectly, SMBs run the risk of what’s known as stacking MCAs, where multiple advances are stacked on top of one another, which can lead to untenable payment percentages. 

Emerging trends in merchant cash advances 

The MCA industry has been quick to embrace technological advancements. As financial technology, or fintech, continues to evolve, it has introduced innovative solutions that enhance the efficiency and accessibility of MCAs. One such example is the integration of artificial intelligence (AI) and machine learning algorithms to automate the underwriting process, resulting in faster approvals and more accurate risk assessments.

While traditional financial underwriting can create a one-size-fits-all approach that overlooks many businesses, fintech-enabled MCAs can analyze revenue patterns and determine the eligibility of a wide range of business almost instantly. At Pipe, we leverage state of the art technology to make capital more accessible to business owners, directly through 

 and embedded in the software platforms they rely on everyday to run their businesses. With a deeper understanding of revenue trends for each small business, we’re able to create customized capital offers while minimizing risk to reduce financing costs. Our data-driven approach also allows for quick, streamlined applications and approvals.

Regulatory changes and their implications

The merchant cash advance industry operates in a dynamic regulatory environment. Recent regulatory changes have sought to enhance transparency and protect borrowers from potential predatory practices. 

Pipe was built by entrepreneurs for entrepreneurs

. Our mission is to give business owners fair, fast, transparent access to unbiased capital so they can grow on their terms. That’s why every advance comes with a simple, flat fee, disclosed up front and paid over time with a percentage of revenue.   

As the regulatory landscape continues to evolve, it is crucial for both capital providers and SMB owners to stay informed and comply with the latest regulations. Adapting to these changes will foster a healthier and more sustainable merchant cash advance industry.

Predictions for the future of merchant cash advances

As demand for alternative financing options ramps up, merchant cash advances are poised for continued growth. Specifically, MCAs are expected to gain further traction in industries such as retail, hospitality, and e-commerce, where revenue tends to fluctuate based on seasonality. These industries tend to struggle with traditional loans and need an alternative source of financing that can adapt to their revenue patterns.

Business owners are increasingly looking for 

financial services embedded in the software

 they use to run their businesses day to day. This is likely to be one of the biggest areas of growth for MCA products in the future. Since MCAs are based on the payment streams processed by a business, any software platform that helps companies accept payments has the potential to 

 product to help their merchants access financing based on those processed payments. This allows small businesses to streamline their operations and obtain financing through a provider who deeply understands their industry.

The impact of economic shifts on merchant cash advances

The economic landscape also plays a vital role in the performance of merchant cash advances. Economic shifts, such as recessions or industry-wide disruptions, can significantly impact the availability of capital, volume of sales, and, consequently, the payment capabilities of businesses. This can make traditional loans difficult to access, especially for businesses with irregular revenues or those with low credit scores or thin credit files. Regardless of the economic cycle, it’s important for both funders and SMB owners to closely monitor economic trends so they are not caught unprepared. 

Preparing for the future: Strategies for SMBs

Evaluating the suitability of merchant cash advances

Before considering a merchant cash advance, SMB owners must assess their business's specific needs and financial capabilities. Understanding the risks, such as the costs and payment structure, is essential for making an informed decision. SMBs should evaluate whether the benefits of accelerated funding outweigh the potential drawbacks, ensuring that an MCA aligns with their long-term goals and financial sustainability.

The merchant cash advance industry is continually evolving, with technological advancements and regulatory changes shaping its trajectory. SMBs must be proactive in adapting to these expectations to maximize the benefits of MCAs and navigate any challenges that may arise. Staying informed about industry trends, exploring different financing options, and cultivating a strong financial management strategy will enable SMB owners to thrive.

The future of merchant cash advances holds both promising trends and potential challenges. While merchant cash advances can offer a lifeline to SMBs, it is essential to perform due diligence on the provider and ensure the funding option is a good fit for your business. By embracing these strategies and staying agile, SMBs can position themselves for success.

Gain insights into the future of merchant cash advance funding and how it will help SMBs access capital for growth in the coming years.

Merchant cash advance trends every SMB should know about

The Future of Merchant Cash Advances: Trends and Predictions for SMB Financing

Small and medium-sized businesses often need financing to help manage their 

and grow their companies. However, many struggle to qualify for traditional term 

. Luckily, there's another financing option available: a business line of credit. If you're unfamiliar with this type of loan, let's break it down and explore its benefits for business owners.

A business line of credit is a flexible financing solution that provides businesses with readily accessible funds, which they can draw on as needed. You can think of a business line of credit as a financial lifeline for businesses struggling with cash flow issues.  It offers the flexibility and convenience needed to access funds whenever necessary. 

Unlike small business loans, where businesses to borrow a fixed lump sum and repay it over a fixed period, a business line of credit operates differently. With a line of credit, businesses can withdraw funds as they require up to the approved limit, paying interest only on the amount they have borrowed and not on the entire credit limit. The key feature of a business line of credit is that once you’ve repaid the borrowed amount, the credit becomes available again for future use, just like a credit card.

With a business line of credit, businesses can cover short-term expenses such as payroll, 

, or unexpected costs. It can also be used to take advantage of opportunities that demand quick access to funds, such as a new marketing campaign or fulfilling a large customer order.

Additionally, a line of credit provides businesses with ongoing access to capital without the need to reapply for a loan each time they require funds. This can save time and effort compared to traditional 

. Interest rates on lines of credit are typically lower than those on credit cards, making them a more cost-effective financing option for businesses.

Overall, it gives your business much-needed financial flexibility to manage cash flow fluctuations and seize growth opportunities as they arise.

What are secured and unsecured lines of credit?

Now, let's talk about secured and unsecured lines of credit. Business lines of credit can be categorized into two types: 

So what exactly sets them apart? Secured lines of credit are guaranteed by 

Learn what a business line of credit is, the pros and cons of this type of credit, and how it can help your business grow. 

Finance your Business

Exploring the future of embedded finance: Insights from Luke Voiles and Hiroki Takeuchi at Web...

Is Pipe a loan?

Pipe Capital: A merchant-friendly cash advance model built to improve capital access for SMBs

What is a Merchant Cash Advance and How Can It Help Small and Medium Businesses?

The Future of Merchant Cash Advances: Trends and Predictions for SMB Financing

Understanding Business Lines of Credit

Pros and Cons of Short-Term Financing for SMBs - Understanding the types of financing and which one...

How to Improve Your Business Credit Score

A Guide To Understanding Working Capital

Pipe Blog

SubscribeGet the best of Pipe's Blog

Finance your Business

.css-13o7eu2{display:block;}Pipe Blog

Subscribe.css-l2lbpd{display:block;margin-top:var(--chakra-space-2);color:var(--chakra-colors-textSecondaryDark);}Get the best of Pipe's Blog

Pipe Blog

SubscribeGet the best of Pipe's Blog