When “The Next Loan” Never Comes: A Common MCA Scam - Carroting
- MCA Exposed
- Aug 15
- 2 min read
One of the most common merchant cash advance scams looks simple on the surface. A broker or funder promises a business owner a real term loan — something stable, long-term, with lower payments. But there’s a catch:
“You can only get the loan if you first sign a Merchant Cash Advance.”
For many small businesses, this sounds reasonable. They need money now, and they believe a conventional loan is right around the corner. So they take the MCA, expecting that once they prove themselves, the loan will come through.
But it never does.
The promised loan is a complete misrepresentation — a carrot dangled to make the business sign an MCA deal that drains their cash flow with daily or weekly debits. Once the ink is dry, the broker disappears, the phone calls stop, and the “loan department” never existed in the first place.
Why This MCA Carroting Scam Works
False hope: Business owners believe they’ll soon refinance into a safer product
Urgency: The MCA is presented as a quick bridge while the “real loan” is processed
Paper trail: By the time the merchant realizes the loan isn’t coming, they’re already locked into the MCA contract
Why This Matters
This isn’t just bad business — it’s fraud. Making false promises to induce someone into signing a financial agreement is a deceptive practice. Industry lawyers and regulators know about this tactic, but very few cases have gone to court
That’s why awareness matters. The more merchants recognize the scam, the harder it is for brokers to keep using it
What You Can Do
Be skeptical of “future loan” promises. If a broker says you’ll qualify for a better loan later, get it in writing — and check if the company even offers real loans
File reports. If this happened to you, make a record. Report it to your state attorney general, the FTC, and the FBI’s Internet Crime Complaint Center
Share your story. At MCA Exposed, we collect merchant reports to show how widespread these practices are. One voice can be dismissed, but many together create pressure for action
