E-Commerce Retailer Merchant Cash Advance Company
If your business has a merchant account, it may be possible to apply for a merchant cash advance. An advance is different from a loan because it is a credit against future credit card transactions. Therefore, there are less stringent requirements as it relates to getting the funding that your company needs.
What Are the Credit Requirements for a Merchant Cash Advance?
There are no credit requirements to get a merchant cash advance. This means that you can get the money that you need even if you have a low credit score or if your business has a thin credit history. In many cases, new companies can’t get a business loan because they haven’t been in existence long enough.
What If My Business Sells Controversial Products?
It is possible that your company can’t get traditional funding because of the industry that it’s in. Fortunately, merchant cash advance providers generally don’t worry about what goods or services that you provide to customers. As long as what you are selling or providing to customers is legal, you can generally get a merchant cash advance. This can be ideal for a gun makers, casino owners or others who may be shunned by traditional lenders because of what they provide to customers.
Are There Limits to How Much I Can Borrow?
Yes, there are limits to how much money you can get from a cash advance. Generally speaking you will get anywhere from 50 to 250 percent of your average credit card receipts over the last two to six months. Furthermore, the most you can get from an advance is around $250,000. However, this can still be enough to hire new employees, buy a building or take other steps to grow your business.
When Do I Start Repaying the Loan?
You will start repaying your merchant cash advance the same day that you get the funds deposited into your business bank account. Each day, the advance provider will hold back anywhere from 5 to 25 percent of credit card revenues generated that day. Furthermore, you’ll be charged a factor rate that ranges from 1.1 to 1.5, and this translates to an interest rate of anywhere from 10 to 50 percent. Loan terms can be as short as three months or as long as two years.
Do I Need to Put Up Collateral?
Since your company obtains the advance based on anticipated future credit card receipts, there is no need to put up additional collateral to secure the funding. Therefore, you don’t have to worry about losing personal or business assets in the event that it isn’t repaid in full or in a timely manner.
Are There Reasons to Avoid a Merchant Cash Advance?
While there are many good reasons to take a merchant cash advance, there are some negatives to them as well. For instance, they often come with higher annual percentage rates than credit cards. This means that the money may be more expensive to borrow compared to other loan types. If your business doesn’t generate a lot of credit card revenue, the amount of money that you can gain access to from a merchant cash advance may be limited. Prior to accepting an advance or loan, it is a good idea to determine the company’s ability to repay it.
When your business needs money in a hurry, take a look at a merchant cash advance. The loan process is easy and only takes a few minutes to complete. In most cases, the funds will arrive in your business bank account within 24 to 48 hours of your application being approved.