Miami City

Miami: the new Silicon Valley, future paradise for MCAs?

Over the years, Miami has positioned itself as a magnet for startups and technology companies around the world. According to the U.S. Census, County Business Patterns, 2015, almost all businesses in Miami-Dade are Small Businesses. In fact, 98,2% of Miami’s businesses have less than 100 workers, and 81,3% of them employ less than 10 people. Within  this ecosystem the Merchant Cash Advance quick and easy financing options are a great choice.

Contrary to trends in other states that hinder this industry, Miami seeks MCAs to strengthen their business ecosystem, also driven by the last decisions of the Third District Court of Appeal  which concluded that Merchant Cash Advances are Not Usurious in Florida. Now we also have statements from Miami’s Mayor Francis Suarez.

What were his words? Why is Miami ideal for the future of MCAs? And how was the path leading this industry to the present? Keep reading this post and find all the answers.

The Industry’s history

The merchant cash advance industry has been around since the 1990s and boom popularity in 2005. Prior to 2007, MCA financial advisors thought that the industry would end soon, but this was far from the next event.


The MCA industry flourished. During the 2008 recession, financial institutions and lenders hardened the parameters and started to reject more and more credit lines.The subsequent pushback among traditional lenders from the small business financing space sent them to the Merchant Cash Advance (MCA) Industry. 


This medium successfully documented the early nature of this industry. During this time the supposed massive amounts of innovation and growth were minimal compared to what the industry is doing now. There were not many new companies or people entering the industry, which made growth difficult. During the Mid-2000s, there were few big players in the market. After 2010, the industry grew and millions of dollars came rushing in. Large companies greatly increased their capital to lend to businesses through large-scale financing with banks like Wells Fargo and TAB bank.

Today, MCAs generate 5 to 10 billion dollars in advances every  year in the U.S. alone, with estimates as high as twice that. As this industry matures and the tech world advances, more tech companies are utilizing merchant cash advances.

Miami is the Top City for Small Business Growth

Miami is the Gateway to Latin America for importers and exporters. The city has a diverse economy, and it is in the midst of a real estate and construction boom. It also is a hub for travel and tourism, and is the media capital of Spanish language broadcasting. Miami’s IT sector is also growing. This ecosystem is perfect for small business growth.

All roads lead to Miami

Why is Miami key for the Merchant Cash Advance Industry growth?

The story begins with a Tweet in which Delian Asparouhov (Principal at Founders Fund) invites other investors to move Silicon Valley to Miami and receives a response from the mayor of that city saying: “How can I help?”

In March 2021, Miami Mayor Francis Suarez referred to this issue and specifically to the MCA industry in an interview with the specialized portal deBanked®: “…we definitely want to make sure that small business merchants and lenders are able to capitalize small businesses in our community. Miami’s a very thriving small business community… one of the things that people have criticized us for is we don’t have those big massive companies. We’re actually really built on small businesses. So for us, having fluidity of capital, liquidity of capital, access to capital are enormous things in terms of scaling. And I think that’s one of the things that we’re seeing change now, since we’re getting there because of technologies. We’re getting a tremendous amount of access to capital that we weren’t getting before”.

With this ecosystem emerging, MCAs need to rely on technology to meet the growing demand. It is essential to optimize a variety of workflows, including underwriting and loan monitoring to strengthen small businesses customer experience. Financial technology will play a leading role in this regard to continue driving the MCA industry growth.

As the industry grows, more and more players will get into the MCA, and in this new reality the ones with technology and perfect execution will be the winners.

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