Merchant Cash Advances (MCAs) have long existed on the margins of private credit – lucrative, fast-moving, and misunderstood. For some, they conjure images of risky originators and opaque terms. But today, a new wave of operators is rewriting the playbook, bringing transparency, compliance, and structure to an asset class finally ready for institutional capital.
Among these, Cadi Capital stands out not just for its performance, but for how it earns it.
A Smarter Model for a Risky Asset Class
At its core, an MCA is a purchase of future receivables – a short-term advance repaid daily or weekly based on a business’s cash flow. It’s fast, flexible capital for merchants who often can’t access traditional loans. But that flexibility has historically come with fragmentation: inconsistent underwriting, concentrated exposure, and minimal investor safeguards.
Cadi approaches the space differently. Rather than originate directly, they syndicate investor capital across a diversified network of vetted MCA funders. Each transaction is evaluated against strict internal guidelines – only first or second positions, tight exposure caps, and risk-adjusted deal terms that favor portfolio durability over short-term gain.
This model gives investors access to a pool of 13,000+ transactions without tying their fate to any single originator. It’s not just about chasing yield – it’s about controlling risk in a high-yield environment.
Underwriting That Puts Risk First
Cadi’s edge comes not from being louder than other firms, but more disciplined. Their underwriting standards exclude entire sectors deemed too volatile. Their monitoring process runs weekly. Their track record of default rates – currently around half the industry average – is a result of this rigor, not a lucky streak.
Liquidity Without the Lockups
Importantly, Cadi also avoids many of the friction points that turn investors off from MCA. There are no performance fees. No layers of unnecessary intermediaries. Capital is deployed quickly and returned weekly. Liquidity options – including internal repurchases and secondary transfers – are available without penalty, providing rare flexibility in an illiquid asset class.
The Regulatory Shift and Investor Tailwinds
As regulatory scrutiny on lending tightens and investor appetite shifts toward shorter-duration, cash-flowing assets, MCAs are finally having their moment. But not all players are built for this new era.
Cadi Capital: A Quiet Force in a Noisy Market
Cadi Capital is quietly helping redefine what responsible, scalable MCA investing looks like. For allocators seeking uncorrelated returns with real transparency, it might be time to take another look at a corner of private credit that’s growing up fast.
Written in partnership with Tom White
