MCA funder economics — restaurant vs trucking vs construction.

The 60-second answer

A funder doesn't price your file in isolation. They price it inside the loss curve of your industry — and the three biggest MCA-borrowing industries have very different loss curves.

• Restaurants — highest default rate of the three (8–14% portfolio default rate in 2026 industry data), highest priced (1.22–1.34 typical), highest seasonality, smallest balance sheets.
• Trucking — middle default rate (5–9%), but most carriers shouldn't be on an MCA at all. Factoring is the structurally correct product. MCA pricing for trucking is 1.20–1.30 typical when used.
• Construction — lowest default rate of the three (3–7%) due to collateral and balance sheet strength, but MCA is structurally wrong for prime contractors with progress-payment cycles. Pricing 1.18–1.28 typical.

Restaurant economics — why the rates are highest

Restaurants pay the highest MCA factors of the three industries for four structural reasons:

1. High default rates. Restaurant default rates run 8–14% on MCA portfolios. Construction runs 3–7%. That delta gets priced into every restaurant offer.
2. Cash-cycle volatility. A restaurant's revenue can drop 30–50% in a single week (weather, staffing issue, food cost spike). Funders price for the downside.
3. Thin balance sheets. Most independent restaurants have minimal collateral. The funder's recovery if you default is essentially the personal guarantee and whatever's left of the equipment.
4. Owner-operator concentration risk. When the owner is also the general manager, head chef, and bookkeeper, any single point of failure cascades fast.

Typical 2026 restaurant MCA economics

• Factor: 1.22–1.34 (single location independents)
• Factor: 1.16–1.24 (multi-location or franchise)
• Factor: 1.12–1.18 (Toast Capital on strong Toast merchants)
• Term: 6–15 months
• Daily ACH or POS holdback 9–18%
• Reconciliation: critical for seasonal restaurants

Trucking economics — why factoring beats MCA

Trucking has a structural feature that restaurants and construction prime contractors lack: a predictable, ledger-credit receivable from brokers. Once you haul a load and the BOL is signed, you have a receivable worth 90–97% of the rate confirmation. That receivable is the perfect collateral for invoice factoring at 1.5–3.5% per invoice.

MCA pricing for trucking sits at 1.20–1.30 (12-month equivalent ~30–50% APR-equivalent). Factoring pricing for trucking sits at 1.5–3.5% per invoice (annualized ~20–40% APR depending on broker payment cycles). For the same dollar of working capital, factoring is usually cheaper for trucking.

Trucking MCA only makes sense when:

• The need is for non-receivable purposes (truck repairs, fuel buffer, payroll bridge)
• The carrier is already at factoring capacity
• The carrier needs cash faster than factoring can deliver
• The carrier has been declined by all factors

Typical 2026 trucking MCA economics (when MCA is the right tool)

• Factor: 1.20–1.30 (owner-operators and small fleets)
• Term: 6–12 months
• Daily ACH 4 or 5 days per week
• Reconciliation: rare in trucking MCA contracts

Construction economics — why the loss curve is lowest

Construction MCAs default at the lowest rate of the three industries (3–7% portfolio default) for three reasons:

1. Equipment collateral. Even small contractors typically own $50K–$500K of equipment. Funders' recovery on default is materially better than for restaurants.
2. Balance sheets are larger. Construction businesses tend to carry more working capital reserves than restaurants of similar revenue.
3. Personal guarantees attach to homeowner equity. Most construction owners are also homeowners, and the personal guarantee gives funders meaningful recovery leverage.

The catch: construction MCA is often structurally wrong for the merchant. Prime contractors run on AIA G702/G703 progress-payment cycles, where payments arrive 30–60 days after work is performed. That's a receivables-financing problem, not an MCA problem.

Typical 2026 construction MCA economics

• Factor: 1.18–1.28 (general and specialty contractors)
• Term: 6–18 months
• Daily ACH 5 days per week
• Reconciliation: case-by-case in most contracts

Construction MCA makes sense when:

• The contractor doesn't have receivables to factor (cash-billing or residential)
• The capital need is for materials prepay before a confirmed job starts
• The contractor has been declined for SBA and bank lines
• The opportunity cost of waiting exceeds the MCA fee (bidding on a large job, etc.)

Head-to-head: same $100K advance, three industries

Restaurant — $100K, 18-month-old single location, 620 FICO owner

• Expected factor: 1.26 (B-paper generalist) or 1.16 (Toast Capital if eligible)
• Total payback: $126,000 (generalist) or $116,000 (Toast)
• Daily ACH: ~$500 (generalist 12-month) or ~$460 (Toast)
• APR-equivalent: ~52% (generalist) or ~32% (Toast)
• Reconciliation likelihood: medium (depends on funder)

Trucking — $100K, 5-truck fleet, 3-year-old MC authority

• Expected MCA factor: 1.24 (B-paper generalist)
• Total payback (MCA path): $124,000 over 12 months
• Alternative factoring path: ~$118K total cost on same working capital need spread over 12 months (1.8% per invoice × $120K monthly invoiced)
• Factoring saves ~$6,000 + provides ongoing AR financing

Construction — $100K, 8-year general contractor, 680 FICO owner

• Expected MCA factor: 1.20
• Total payback (MCA path): $120,000 over 12 months
• Alternative SBA 7(a) at this profile: $100K at 10% APR, 7-year term, total cost ~$42,000 of interest spread over 84 months
• SBA path saves ~$78,000 of interest but requires 30–60 days to fund

Decision framework — pick the right tool by industry

1. Restaurant. MCA is often the right tool because alternatives are limited. Prefer vertical specialists (Toast Capital) when eligible. Reconciliation policy matters more than headline factor.
2. Trucking. Factoring first. MCA only when factoring is exhausted or the capital need isn't tied to receivables.
3. Construction prime contractor. AR financing or SBA first. MCA only when both fail or the capital is for material pre-pay on a confirmed job.
4. Construction residential / cash-billing. MCA can be the right tool if no AR exists. Look for funders that understand the residential cash cycle.

What the three industries have in common

• Stacking is the #1 way to default in all three. Restaurant, trucking, construction — the default rate triples once a second MCA opens.
• Renewal cycles are predatory unless managed. All three industries get renewal solicitations at 50% paid. Decline by default.
• Personal guarantee always. No non-recourse MCA exists in any of the three.
• Reconciliation matters. All three have seasonal or cyclical revenue patterns. The funder with the better reconciliation policy is worth a small price premium.