Long Island Merchant Cash Advance | Business Cash Advances
Merchant Cash Advance Long Island
For businesses in need of cash, a merchant cash advance is a good option. This type of funding option can be approved in just a couple of hours. Once the advance is approved, the money can be in your account within just 24 to 48 hours. Whether you need to cover payroll or had a slow month, a merchant cash advance can help you get the funding that you need.
The Way It Works
A Long Island merchant cash advance is just an advance on your future earnings. The lender figures out how much you can get based on your credit card sales. Once you are approved, you immediately start paying back the advance based on your sales. In general, you can expect to repay 5 to 20 percent of your credit card sales.
The lender sets the borrowing amount based on your credit card sales for the last few months. They will generally look at two to six months of your recent sales. Then, they can give you 50 to 250 percent of your monthly transactions from credit cards. This can work out to amounts ranging from $2,500 to $2 million.
The Advantages of Getting a Long Island Merchant Cash Advance
While a merchant cash advance is not the right choice for everyone, it can be a viable option for some companies. Keep in mind that you will have to automatically repay the advance through your credit card sales. This can reduce your cash flow until the advance is repaid. In addition, this type of advance has higher fees than a traditional term loan. If you need cash quickly, it might be a useful alternative.
Online Application: One of the biggest benefits of a merchant cash advance is the application process. All of your documents can be easily submitted online. After you submit your application, your advance can be approved in just a few hours.
Flexibility: With a term loan, you have to repay a fixed amount at a set time. When you get a merchant cash advance, you only repay a percentage of your sales. This means that you can pay less if you suddenly have a slow month. In addition, you can change the repayment terms so that it takes 90 days to 24 months to repay the advance.
Bad Credit Is Not a Problem: Another benefit of a merchant cash advance is that your credit score is not a problem. The lender gives you the money based on your sales. As long as your business has a good track record of sales for the last few months, you can qualify for this funding option.
No Collateral: Many banks require collateral for term loans. If you do not have business assets or do not want to risk your assets, then you need an option that does not require collateral. With a merchant cash advance, no collateral is necessary.
Fast Funding: With this type of funding option, you can get cash in as little as 24 hours. In addition, a merchant cash advance has fairly high limits. You can get an advance for amounts ranging from $2,500 to $2 million.
Is a Long Island Merchant Cash Advance Right for Me?
To determine if this option is right for you, you need to look at the factor rate and the holdback percentage. The holdback is the percentage of your credit card transactions that you pay back to the lender. Normally, this amount is between 10 to 20 percent. The factor rate is generally between 1.1 to 1.5. Merchant cash advances use factor rates instead of an APR, so the costs can quickly add up if it takes you longer to repay the advance.
The good news is that holdbacks give you more flexibility. You only repay a percentage of your sales, so the dollar amount is lower if your sales are lower. This can lead to higher overall costs though, so it is important to consider the holdback and factor rate before you apply for a merchant cash advance.
Learn more about Long Island Merchant Cash Advance Loans
What is a Long Island merchant cash advance?
A merchant cash advance gives company owners a way to get a lump sum advancement on future credit card sales transactions. This service is not a conventional loan. Merchant cash advance providers are happy to work with company owners who have dinged up personal or business credit.
Merchant cash advance providers use recent financial statements and other business related documents to evaluate whether to issue a merchant cash advance. All your business needs is a provable operational history and supporting credit card sales transactions to get considered.
How is a Long Island merchant cash advance different from a loan?
A merchant cash advance offers business owners an ‘advance’ on future credit card revenues the company generates. Providers of this service use the companies average credit card sales to determine how much they are willing to advance. Most providers use the receipts from the previous 2-6 months to decide the lump sum advanced to business owners. While not always the case, cash advances that amount from 50% up to 250% of the companies credit card transactions are available. Qualifying businesses can get access to funds ranging from a few thousand dollars up to over one million dollars, based on your most recent credit card sales volume.
Unlike conventional loans, a merchant cash advance does not use an APR (Annual Percentage Rate) to calculate the interest and repayment terms. Merchant cash advance companies use what’s known as a ‘holdback’ or ‘retrieval rate’ in combination with a ‘factor’ to establish the amount that gets paid back. The terms of repayment can be as short as 90 days to as long as two years, based on the terms of the merchant cash advance agreement.
Another significant difference between a conventional business loan and a merchant cash advance is payments get made every day, based on the credit card receipts for that day’s business. The holdback percentage usually falls between 5% – 20% of total credit card receipts, plus the factor. The factor is a fractional amount, typically between 1.1 to 1.5. This factor is a fee paid to the advance loan originator. It’s a predictable payment made from the company bank account until the loan is paid off in full.
How can funds from a merchant cash advance get used?
Funds that are made available through a merchant cash advance can get used on anything. New equipment, capital improvements, payroll, inventory, rent or mortgage, repairs, marketing, etc. Additionally, these funds can get used to smooth out cash flow during slow times or to get prepared for seasonal spikes and demand.
How do I apply for a Long Island merchant cash advance?
To make it easy and convenient for business owners, most merchant cash advance providers offer a secure online portal to start the application process. Company owners will need to provide and upload all required financial documents to give the merchant cash advance provider with an idea of the business strength, based on recent credit card receipts.
Applications get processed quickly, so borrowers will find out if they qualify for an advance in hours or days, not weeks or months. For business owners who need to raise capital quickly to pay for an urgent need, merchant cash advance services offer a fast financial solution to their problem.