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Federal Reserve Data Confirms Rising Demand for Merchant Cash Advances

  • 7 days ago
  • 1 min read
Line chart showing online lender applications rising from 17% in 2020 to 29% in 2025, with text 'Speed is not a bonus. It is the point.' Data from Federal Reserve 2026 Report on merchant cash advances and small business financing

New findings from the Federal Reserve's 2026 Report on Employer Firms show a clear shift in small business financing behavior.


38 percent of small employer firms applied for financing in the prior 12 months. 8 percent specifically sought merchant cash advances. Applications at online lenders increased to 29 percent in 2025, up from 17 percent in 2020.


The report highlights a notable trade off: 60 percent of borrowers from online lenders reported higher than expected borrowing costs. This data confirms that while cost remains a factor, access and speed often drive the final decision.


The demand for merchant cash advances is not driven by preference for higher costs, but by the need for capital that fits operational timelines. The data matches what I observe daily.


Source: 2026 Report on Employer Firms, Small Business Credit Survey, Federal Reserve Banks, March 2026. https://www.fedsmallbusiness.org/2026-report-on-employer-firms?utm_source=Reserve-Banks&utm_medium=social&utm_campaign=sbcs-marketing

 
 
 

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