Zivoe's 2025 Year-End Update: Expanding into the $33B MCA Market

As we close out 2025, we're excited to share a significant expansion of Zivoe's lending strategy: our entry into merchant cash advance, a $33 billion market that sits at the heart of private credit's growth story.

The State of Private Credit

Private credit continues to be one of the defining stories of finance this decade. The market has grown from roughly $500 billion in 2014 to over $2 trillion in 2023, and is projected to exceed $3 trillion by 2028.

While many of you may have heard about the First Brands and Tricolor bankruptcies, industry leaders view these as edge cases, and the overall outlook for private credit going into 2026 remains optimistic.

Blackstone’s CEO Steve Schwarzman stated on Tuesday that he did not share market concerns over private credit relating to recent bankruptcies in the autos sector.

"There were several bankruptcies that were popularized in October ... and they were blamed on private credit," Schwarzman said in a video presentation during Abu Dhabi Finance Week.

"In fact, all three deals were due diligence by banks, underwritten by banks, syndicated by banks, and private credit was sort of not in the room," he added.[1]

Forward looking guidance for private credit also remains strong:

• Research from S&P Global shows resilient credit conditions heading into 2026, supported by steady economic growth and credit fundamentals.[2]
• Bank of America expects private credit defaults to fall from 5% in 2025 to 4.5% in 2026 citing the lower of the Federal Reserve target rate as the driver.[3]
• BlackRock highlights that private credit fundamentals have held up well through recent volatility, with conditions expected to remain stable into 2026.[4]

Tokenization is now bringing private credit on-chain, and Zivoe has been positioned at this intersection from the start. Now we're expanding our strategy to capture more of this opportunity.

Expanding into Merchant Cash Advance

What is an MCA?

A merchant cash advance (MCA) is a financing arrangement where a provider purchases a portion of a business's future receivables at a discount. Unlike a traditional loan, an MCA does not establish a debtor-creditor relationship or a fixed repayment schedule. Instead, capital is advanced in exchange for an agreed-upon share of the merchant's future revenue until the purchased amount is repaid.

For example:

• A provider might advance $100,000 to a merchant in exchange for $135,000 of future receivables, a factor rate of 1.35x.
• The merchant repays through a fixed percentage of future revenue, typically over 3-6 months. Once repaid, the provider can redeploy that capital into a new advance.
• This turnover, often 2-3x per year, supports compounding of returns over time, with performance visibility emerging earlier than in longer-dated private credit strategies.

Inside the Growing MCA Market

The MCA market has shown substantial growth with volumes reaching $33 billion in 2024 and is projected to reach $85 billion by 2035, reflecting a compound annual growth rate of roughly 9%.[5]

Demand is concentrated among small and medium enterprises (SMEs) with annual revenues typically under $5 million. These businesses often require working capital for inventory, payroll, equipment, or opportunistic investments, but face structural barriers to traditional bank credit and are too small for large private credit lenders.

Approximately 28% of small businesses reported difficulty securing financing in early 2025, up from 22% a year earlier.[6] The International Finance Corporation estimates the global SME financing gap at $5.7 trillion annually.[7] Against this backdrop, MCAs have become critical tools for SMEs to bridge short-term liquidity needs.

MCA adoption is driven by several structural factors: speed of funding (often within 24-48 hours) and flexible repayment tied to revenue. For merchants facing urgent working capital needs, whether for inventory, equipment repair, or seasonal cash flow gaps, MCAs fill a void that traditional lenders cannot address efficiently.

How Zivoe is Approaching This

Zivoe is expanding into the MCA market through partnerships with established servicing platforms that have multi-year track records and billions in cumulative origination volume.

This approach aligns with how we've always operated: short-duration lending backed by real cash flows. MCAs fit that thesis naturally, and tokenization makes it possible to connect on-chain capital to this opportunity at scale.

We'll share more details on specific partnerships in the future. For now, we're excited about what this expansion means for Zivoe's growth and for the returns we can generate for our liquidity providers.

Stay Connected

If you're interested in learning more about Zivoe or participating as a liquidity provider, visit zivoe.com. You can also reach out directly at [email protected] or on Telegram @thorabbasi.