What the Election Means for The Merchant Cash Advance Business

David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies. To connect with David, email david@betteraccountingsolutions.com.

After what feels like years, next week the United States of America will finally vote in our next president and get a break from the incessant political chatter…until it all resumes the next morning.

While the implications of this election are obviously enormous in a whole number of arenas, most significantly for us the repercussions of who we elect will have a major effect on the merchant cash advance business. With President Donald Trump and Vice President Kamala Harris proposing very distinct visions for their economic and regulatory agendas, MCA businesses will need to respond to who wins and adjust accordingly.

Here’s a closer look at how the upcoming presidential election might affect the merchant cash advance industry.

1. Tax Policies and Business Borrowing

Trump has promised to extend the Tax Cuts and Jobs Act (TCJA) and further reduce corporate taxes to 15%. This could increase small business profitability, which might lead some companies to rely less on MCA services, opting instead for more traditional financing solutions. However, businesses could still need short-term capital for expansion or to take advantage of new tax incentives, keeping MCA demand steady.

Harris’s administration is expected to take a different approach, focusing on progressive tax policies that could increase the tax burden on corporations and high-income earners. In such a scenario, businesses may experience tighter cash flows and turn to MCAs for quick injections of capital to meet operational needs.

2. Regulatory Climate and Business Sentiment

The regulatory environment will play a major role in shaping MCA activities. Trump’s platform emphasizes deregulation, which could reduce compliance costs and encourage entrepreneurship. With fewer regulatory hurdles, more entrepreneurs might be empowered to take a chance to open their dream businesses and seek short-term financing to fuel growth.

In contrast, Harris is likely to advocate for stronger oversight across industries, which could introduce stricter regulations for MCA companies. Increased compliance requirements would raise operational costs and change how they do business, forcing MCA firms to adapt quickly to remain competitive.

3. Tariffs and Supply Chain Impact

Trade policies are another critical area that will shape demand for MCA services. Trump’s proposed tariffs, such as a blanket 10%-20% on imports, would disrupt industries that rely heavily on global supply chains. Businesses affected by tariffs might seek cash advances to cover working capital needs as they adjust to higher costs and delays. While their loss is our industry’s gain, MCA providers could face greater risks if these businesses struggle to manage cash flow, increasing the chance of defaults.

If Harris focuses on stabilizing international trade through alliances and regulatory frameworks, businesses might experience more stable operations. However, as mentioned earlier, her compliance-related policies could still push some companies to seek short-term funding, keeping MCA services relevant in certain sectors.

4. Interest Rate Policy and Capital Costs

The election will also influence interest rate policy. Trump has criticized the Federal Reserve’s recent actions and indicated that he would like to replace its leadership. If this shift results in looser monetary policy, the cost of borrowing money will decrease, prompting more businesses to take loans from traditional banking institutions instead of MCAs.

On the other hand, if interest rates remain high, businesses may find it harder to secure bank loans. Under these circumstances, MCA services—known for quick access to capital—remain attractive to small businesses facing cash flow challenges.

5. Changes in Consumer Spending and Business Revenues

Both candidates’ economic plans will shape consumer behavior, which directly affects small business revenues—the core market for MCAs. Trump’s focus on reducing taxes and expanding domestic energy production may increase consumer spending in the short term, benefiting retail businesses that rely on discretionary income.

Meanwhile, Harris’s potential focus on healthcare, education, and environmental programs could favor businesses in those sectors. MCA providers may see shifts in their client base, with certain industries flourishing while others experience slower growth. These shifts will influence which businesses turn to MCAs for operational funding or growth capital.

Essentially, Trump’s pro-small business, pro-tariff and pro-deregulation positions would be a major boon for MCA businesses. Harris is expected to call for more taxation, more governmental oversight and compliance ordinances, and stifle economic progress in pursuit of a more “equitable economy”. As the political landscape evolves, being prepared for these changes will be key to thriving in the post-election MCA business environment.

David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.

To connect with David, email david@betteraccountingsolutions.com.