What is a Merchant Cash Advance?
A merchant cash advance is a type of loan that is equipped for small businesses that are B2C. MCAs are an advancement on your future sales. There is an agreed upon amount that is predetermined and advanced to your business. The funder will take out a percentage of every transaction your company makes until the fixed amount is paid off. An MCA is the fastest way that a business can get the money they need for business expenses.
This type of financial plan is great for businesses because the amount taken out of your account is based solely off of your sales. If your business is having a slow day, less will be taken out. If your business is having a busy day, more will be taken out. Your business’ cash flow will then fluctuate with your business so you will never be low on working capital. The transactions are automatic as well, so you will never have to worry about writing a check to the funder.
Who Qualifies for Merchant Cash Advances for Businesses?
Businesses that have little to no collateral to put forth, small credit history, and a lower credit score may be eligible for a merchant cash advance. Many lenders don’t have complex standards for qualifying, so many businesses are eligible. Many small businesses appreciate this type of funding because it is fast and can get small businesses the funds they need without breaking the bank over time.