The specs
OnDeckMerchant Capital Source
Product typeMulti-productMCA
Amount range$5K – $400K (term); $6K – $200K (LOC)$5K – $250K
Cost (factor / APR)Term APR 27%+; LOC APR 30%+Factor 1.24 – 1.45 depending on paper grade and position
Speed to fundSame-day for approved files24 – 72 hours after approval
Min time in business12 months4 months
Min monthly revenue$8,000$10,000
Min credit score600+500+
Products
- Term loan
- LOC
- MCA (1st, 2nd, 3rd position)
- Renewal funding
Verdicts by use case
- Established merchant that qualifies for OnDeck (12+ months, 600+ FICO) — Winner: OnDeck. OnDeck term loan at 27 – 50% APR on 24 months is dramatically cheaper than Merchant Capital Source's 1.24 – 1.45 factor (40 – 90% APR-equivalent on 6 – 9 month repayment). For any file that clears OnDeck's bar, OnDeck is the only sane choice on cost.
- B/C-paper file with existing MCA position — Winner: Merchant Capital Source. OnDeck declines stacked files outright. Merchant Capital Source underwrites 2nd and 3rd position MCA as a deliberate product. For files with existing positions needing additional capital, MCS is in the cascade where OnDeck isn't.
- Newer business (4 – 12 months TIB) — Winner: Merchant Capital Source. OnDeck requires 12+ months TIB. Merchant Capital Source accepts 4+. Sub-12-month merchants are MCS-only in this pair — though most should wait to cross 12 months and access OnDeck's better pricing rather than overpay at MCS.
- Builds business credit — Winner: OnDeck. OnDeck reports term loan and LOC to commercial credit bureaus. MCS's MCA is structured as receivables purchase and generally does not report. For merchants building business credit, OnDeck is the structural winner — MCS is invisible to D&B and Experian Commercial.
- ISO commission on B/C-paper deals — Winner: Merchant Capital Source. MCS pays aggressive ISO commission on B/C-paper submissions. OnDeck's broker program has a high entry bar (2+ years, $1M+/month volume) and competitive commission only at scale. ISOs primarily routing B/C-paper place through MCS over OnDeck.
The honest takeaway
OnDeck and Merchant Capital Source solve overlapping but distinct problems. The right choice depends on three things you already know about your business: how fast you need the money, how long you've been operating, and whether the capital need is one-time or recurring.
Frequently asked questions
- OnDeck declined my application — is Merchant Capital Source the right next step?
- Sometimes, but exhaust the cheaper middle-tier first. OnDeck declines for 12-month TIB, 600 FICO, or stacking. If you're a 6 – 11 month TIB merchant with clean credit, try Credibly (6-month floor) before defaulting to MCS — Credibly's 1.22 – 1.30 factor on the same file is materially cheaper than MCS's 1.35 – 1.45. MCS is the realistic option for files with sub-550 FICO, existing 2nd positions, or trading history under 6 months.
- Can I refinance an MCS MCA into an OnDeck term loan later?
- Yes, this is a standard upgrade path. Pay down the MCS advance to ~50% of original principal, demonstrate 6+ months clean payment history, then apply to OnDeck once you cross the 12-month TIB threshold. OnDeck's underwriting will see the MCS payment on bank statements and weight total debt-service-to-revenue; if the MCS daily debit consumes more than ~10 – 12% of daily deposits, OnDeck will likely require payoff as a funding condition. Net savings on a $50K refinance can run $8K – $18K.
- Does Merchant Capital Source require Confession of Judgment?
- Depends on the contracting legal entity and the state of merchant domicile. NY-domiciled MCA contracts historically included COJ provisions and the 2019 NY legislation banned COJ enforcement against out-of-state merchants, with subsequent NJ and CA legislation adding further constraints. 2024 – 2025 state legislation further narrowed practical COJ enforcement. Always have an MCA attorney review the contract's COJ jurisdiction clause before signing — practical risk in 2026 is lower than 2019 but the contract language often still includes COJ-style provisions.