Fed Surveys Show Minimal Change in Regular Financing Product Usage

The Federal Reserve’s 2025 survey of small businesses with less than 500 employees revealed that 7% of them regularly used merchant cash advances. That’s the exact same level reported by business owners in 2017 during the same survey, 7%. While news reports have suggested that the product has grown substantially over an eight-year period, respondents indicate that not much has changed.

The approval rate for MCAs is also low compared to alternatives in the market. Respondents, for example, reported that in 2025 they were more likely to get approved for an auto or equipment loan (71% got fully approved) and a mortgage (55% got fully approved) than an MCA (only 48% got fully approved). Business lines of credit were right below that with 45% saying they got fully approved for one.

Respondents were also more likely to have applied for a business line of credit (43% applied), business loan (32% applied), or an SBA loan (20% applied) than they were an MCA (12% applied) in 2025.

“Large and small bank applicants chose their lender based on their existing relationships, while online lender applicants prioritized speed and their expected chance of being funded,” the Federal Reserve report stated.

The 2025 survey was published in the 2026 report and the 2017 survey was published in the 2017 report.