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Are Title Loans Better Than Merchant Cash Advances? We Explore Them Side By Side

Compare Apples To Oranges, Or is it?

Inflation has caused people to look for money in places they usually wouldn't, with the stiffer requirements to get bank loans these days. It is no secret that any business can find itself in a situation where they need cash to cover immediate needs like payroll or inventory. Over the past Fourteen years, the merchant cash advance tool has been the saving grace for thousands of companies across the country. The quick infusion of cash can happen for businesses in many cases on the same day, but not every business can handle the payback terms that a merchant cash advance demands, with more funders switching to a daily draw or weekly draw setting on shorter terms versus the traditional monthly or percentage of credit card sales leaving business owners in a tailspin over cashflow. The much-older industry of title loans is based on the equity or value of an automobile, commercial equipment, or semi-truck, which allows more palatable repayment options, but they are not available everywhere. Title loans and merchant cash advances cost for money in many cases are equivalent, but the terms are not.

Is this even a thing? It depends on the state you are in.

In 2022, Illinois joined Alaska, Connecticut, Hawaii, Maine, Massachusettes, New Hampshire, New York, North and South Dakota, Pennsylvania, West Virginia, Washington D.C., and Wyoming in the list of states that you cannot even look at a title loan in. The other states have the option available.

In some states, merchant cash advances are quickly fading away. States like California and Virginia have implemented laws that make it tougher for businesses to access the quick cash, hindering business owners. If you are lucky enough to operate in a state that does not restrict your access, then you can compare the options.

How do you compare?

The first thing is to identify what you need in funding and what you are going to use it for. If you are going to flip the cash into a profit quickly, then using a short-term financing option like merchant cash advances makes sense as long as you can see the return on investment faster than the payoff date matures. Title loans are only as powerful as the equity in the vehicle used to secure them.

What about trucking companies?

As of 11/9/2022, there are 17 eligible states for trucking company title loan options, and it is expected to grow in 2023.

Key Notes

There are positives and negatives to these programs; The Funded Project has over 300 options outside of the two we are comparing in this investigation. When looking at title loans, your home state where the vehicle is titled is how eligibility is determined, in the merchant cash advance world, eligibility is based on the state you run your business from and register in.

How to know what way you should go?

No two cases are alike. If you are still confused, you should speak with an expert that can help you navigate the options. Title loans can be obtained in over thirty states, and the terms can free up cash flow. The vehicle(s) do not need to be in the business name to do it either. If you owe money on your vehicle, we could still review your case as long as you net cash at closing; in many cases, the title loan can take out the current note. If you are in this situation, there are refinance options we may be able to set up for you as well. The best thing to do is to use the contact us button below and explore your options.


The Metro Life is a proud supporter of The Funded Project platform, a not-for-profit platform for businesses and consumers to find money quickly and safely. You can help us support the platform and the mission to save Main Street America by sharing this article with your social media, by shopping at our merch store, or by doing business with any of our sponsors that have banners in this article or any of our articles.

All money raised helps to pay for tools and resources for businesses that otherwise could not afford them, such as websites, startup funding for young business owners, branding, and the funding program that helps struggling businesses get back on track.

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