What is a Merchant Cash Advance?

A merchant cash advance is a good deal for small business owners in need of capital as it is quick cash for them to operate right away. A company receives required dollar amount into account in exchange for selling a fixed sum of future receivables unlike a traditional small business loan with fixed monthly payments, For example, a company might receive a $50,000 payment in exchange for selling $59,500 of their future credit and debit card sales. But everything is up to a factor.

A merchant cash advance was originally designed as a lump-sum payment to a business in exchange for a certain percentage of future receivables. MCA is available great alternative lending solution to all businesses that accept card payments (Restaurants & Pubs, SPA Salons, Hotels & Motels, etc.)

Key benefits are:

  1. Unsecured finance
  2. Get up to 100% of your average month’s card income
  3. Payback as you earn
  4. Quick & easy process
  5. Cash sales are safe
  6. Perfect credit is not a requirement

Merchant Cash Advances: Rates and Fees

Merchant cash advance providers measure their fees with a factor rate instead of an interest rate. Ranging from 1.23 to 1.56 typically, a factor rate is what you multiply your loan amount by to figure out the total you will owe.

Pros & Cons of Merchant Cash Advance

MCA is catching on as an alternative funding option, especially with such trustworthy companies like offering to finance to even small companies:

  1. Quick access to funds: The whole process takes just up to 72 hours.
  2. Less strict requirements: It is possible to qualify for a cash advance with poor credit history even if you have been denied by several local banks. And no collateral! Just your proof of identity and business ownership. The lender will also need 3 to 6 months of credit card processing statements.
  3. Repayment based on sales: The lender deducts payments from your credit card sales, so if you have a slow day, you pay less and vice versa.
  4. No fixed repayment term: Money is simply deducted from your credit card until is paid in full.

While there are certain pros of cash advances, there are exist also cons:

  1. It can’t be repaid before the end of the term
  2. It can’t be a bit costly

Merchant cash advance from 800fund

If you need to take a merchant cash advance contact by filling out an easy online application form or just give its specialists a call at 212.865.3863. Of course, there are hundreds of companies offering merchant cash advances; that is why just examine MCA providers’ websites and all requirements.

Nevertheless, Company has some competitive advantages:

  1. Application Requirements: just several easy questions instead of the whole list of unnecessary information
  2. Application Process: it takes seconds to approve a borrower, while the other cash advance companies make decision in 3-6 day period
  3. Pre-Approval Time: just seconds, not even a day!
  4. Approval Time: approves same day instead of several days of waiting
  5. Flexibility of Funding: Flexible
  6. Repayment Terms: Extremely Flexible
  7. Time to Fund: a business owner will receive money in account just the same day
  8. Customer Service: the company has highly trained local staff
  9. Value Added Services icon: YES
  10. Referral Fee: YES

How do you think whether a merchant cash advance makes sense? On the one hand, paying off such credit facility with daily credit card sales can bite into your cash flow. On the other, you will repay a less during slower weeks and months — unlike with a small business loan, where you need either make your payments on time or suffer the late fees.

In the end? It’s up to you to understand your business’s financials. Just keep in mind that a merchant cash advance is fast, easy and honest lending solution you can pick.

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1 Comment comments


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