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On Chain

An MCA is not a traditional bank loan but a purchase-and-sale agreement on future revenue. The funding provider (such as Astok) buys a portion of the merchant's future card, e-payment or store revenue upfront at a discount. The merchant receives immediate working capital and agrees to an automatic deduction — a fixed percentage (the split rate) of each day's revenue — until the purchased amount is fully settled.

Traditional loans carry fixed repayment terms, fixed monthly instalments, and usually compound interest and APR calculations — the monthly burden stays the same even when business slows. An MCA has no fixed repayment term: the repayment amount follows the merchant's actual daily revenue. In peak seasons repayments accelerate; in quieter periods they fall in step with revenue, greatly easing the merchant's cashflow pressure.

MCAs do not charge annualised interest. Instead they use a factor rate (typically between 1.08 and 1.18) — a fixed multiplier. For example, a merchant approved for an HK$200,000 advance at a 1.12x factor rate will repay a fixed HK$224,000 in total (HK$200,000 × 1.12). That amount is locked in at signing and never accrues additional penalties or compounding, no matter how long repayment takes.

The split rate is the percentage of each day's settlement automatically routed to the funder (typically between 5% and 15%). For example, at a 10% split rate, on a day the store collects HK$20,000 through e-payments, HK$2,000 (10%) is automatically deducted toward settling the advance, while the remaining HK$18,000 is paid out to the merchant's regular bank account.

Expected repayment days = (advance amount × factor rate) ÷ (average daily revenue × split rate). For example: an HK$100,000 advance at a 1.10 factor rate means HK$110,000 total repayment; at HK$10,000 average daily revenue with a 10% split rate (HK$1,000 per day), full settlement takes about 110 days. Settlement speed tracks actual sales exactly.

Astok securely connects to a merchant's POS systems, e-payment gateways (such as Stripe, Octopus and PayMe) and public Food and Environmental Hygiene Department (FEHD) data through Open APIs. Our AI risk engine automatically analyses twelve months of revenue stability, refund rates, customer retention patterns, seasonal fluctuations and remaining lease term. Without stacks of collateral documents, it computes a tailored factor rate and maximum safe credit line within seconds.

Because MCA repayment follows "no revenue, no repayment", a merchant who closes for renovation or an emergency and takes HK$0 that day owes HK$0 that day. This sits entirely within the contract's terms: no traditional loan default penalties, and no impact on the merchant's personal credit assessment with banks (TU report) — a true partnership in which funder and merchant share both feast and famine.