Many businesses turn to merchant cash advance when they need a fast way to get money for their business. You could also consider looking for working capital from a merchant cash advance provider. Merchant cash advance providers have less stringent credit requirements than banks and other traditional options.
A merchant cash advance is a simple financing solution for business owners to secure the money they need for business growth or to deal with cash flow emergencies. Based on credit card sales, this form of funding is usually quick, efficient, and easy-to-manage.
Merchant cash advances are not considered loans. This form of financing does not work as a traditional bank loan would. They are an advance based on your future sales.
With this type of business financing, a lender provides business owners or companies short-term financing that they pay back with a predetermined percentage of their business’s daily credit card receipts.
This payment is automatically deducted daily, so the business owner doesn’t have to deal with a huge bill every month.
. Easy approval process
. Minimal paperwork.
. Bad credit is accepted
. Quick access to funds
. Suitable for a wide range of business purposes
. More costly than traditional loans
. Daily deduction of credit receipts reduces cash flow
. Less flexibility to switch credit card processors
Merchant Cash Advance Uses
Merchant funding providers don’t have restrictions on how you use your funding. The funds are provided to businesses to take care of the things they need for their business. While you may need it for purchasing inventory, another business may need it for renovations. The merchant cash advance company provides the funding, and you choose how to utilize it.
This funding option can be used to take care of business activities, such as:
. Improving cash flow
. Hiring new employees
. Renovations and expansion
. Purchasing inventory
. Advertising and marketing promotions
Who Can Qualify for a Merchant Cash Advance?
A merchant cash advance is a quick source of short-term financing and can be a great financing solution for business owners who process a large volume of credit card sales in their business.
The primary requirement for a merchant cash advance is you must make daily credit card sales. This funding option is suitable for restaurants, retailers and service companies.
How It Works
Cash advance companies provide you upfront cash in exchange for a portion of your future credit and debit card sales. And, the repayments will be a specified percentage of your business’s daily credit and debit card revenue.
After a merchant cash advance provider has approved your request for funding, you will be presented with an offer. You will be required to enter into an agreement regarding the cash advance.
The funding process is handled quickly and remittances are automatically made from credit card sales. Typically, it’s a percentage of your daily credit card transactions until the amount has been repaid.
Your payments fluctuate based on the amount of revenue being generated. If you have a slow day you pay less, and if sales are booming you pay more. The payback term is typically 3 months to 15 months.
Simple Application Process
Applying for funding is simpler than you might think. Unlike traditional business loans, there are no complicated steps to go through or time-consuming processes. And you do not need to leave your office just to complete an application for funding. Most merchant funding providers have an online application system, which makes it easy and convenient to submit your information and wait for a response.
Merchant cash advance companies use different criteria for approval during the application process than providers of a traditional loan do. Traditional lenders like banks rely heavily on your credit history when they process a loan application. They also have other stringent requirements and can take several weeks to get back to you.
But merchant cash advance providers work with business owners who do not have a great credit history or high credit score.
The online application is quick and convenient. All you need to do is fill out the application and upload the required documents.
Documents you need:
. Bank Statements
. Driver’s License
. Voided Business Check
. Credit Score
. Business Tax Returns
. Credit Card Processing Statements
Once approved, your funds can be made available to you fairly quickly – in as little as 24 hours.
A merchant cash advance can be a great option in certain situations. Merchant cash advance providers help businesses obtain working capital. Businesses that have their cash flow interrupted but want to expand their operations can benefit from a merchant cash advance.
But it is important to do your research and decide if a merchant cash advance a good option for you. If this funding source is right for your business, then review the terms before finalizing the transaction or signing the contract.