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.

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Why an MCA is Better than Other Financing Options

A merchant cash advance is fast. If your business needs the funds within 48 hours, that might not always be possible with a regular loan. The underwriting might take too long, leaving your business in a tight spot. Merchant cash advance financing also frees your business from a fixed amount taken out of your account every month. If your company all of a sudden has a repair to make, that fixed payment could put your business into debt.

The other problem with traditional loans is that they are very hard to qualify for. Your business could be waiting a very long time just get approved by the bank to get the funding. With a merchant cash advance loan, your business can get approved and funded in a day or two. There is also a flexibility that comes along with MCAs. A repayment amount could be anywhere from 4-18 months depending on your business.

Ways to Pay Off Your Merchant Cash Advance

Depending on how your business operates and the industry you work in, there is a perfect pay back option for you:

  • For small businesses that make credit card sales every day the credit card merchant cash advance is best. A daily percentage of sales is automatically drawn out of the account.
  • Some businesses prefer the ACH agreement MCA. This will be a fixed amount drawn out each month via an ACH transaction.
  • Lastly, a lockbox agreement MCA is a final option. This option gives the reins over to the funder. They will have all of your daily sales deposited into a lockbox account. They will next take out their percentages from the account and send the remaining amount to your business account through an electronic transfer.

What Businesses Need For Approval:

Businesses should be expected to present a: driver’s license, bank statements, a voided check, credit score, and any information needed to process the transactions within your account.

small business owner with merchant cash advance

Get Your Small Business Approved and Funded Today

If your business is in need of funds to support growing sales, let us get you matched with a MCA funder today. We listen to what your business does, and how much you are looking to fund, then we dip into our network of funders and match you with the best one in our network. This process takes just a few minutes, and the funder will be able to you approved and funded in a very short time. Remember, the faster you provide the needed information to get funded, the faster your business will receive the advancement. Let us help your business move forward with the working capital to cover repairs, equipment, payroll, or any other cost you might have.