Merchant Cash Advances
A merchant cash advance isn’t a loan. It’s a cash advance we give you based on credit card sales that are deposited in your business merchant account. Business owners can apply for an MCA from Delancey Street and get funding within 24 hours. We deposit the funds directly into your business checking account fast.
Pro’s of merchant cash advances
- Fast access to funds
- Easy approval process
- Bad credit is ok
- Great for a whole array of businesses
- Con’s of Merchant Cash Advances
High Fees than traditional business loans
Daily reduction of cash flow to repay cash advance
You can’t service providers until loan repaid
Cash Advances Explained
If you need to raise capital fast for your business, a cash advance is a great idea. It’s a fast way to raise funding. The funds can be used for anything you need. Some businesses use merchant cash advance to pay for bills that past due. Often, business owners turn to mechant cash advances due to a poor month, or because they need quick cash. Regardless of why you need it – there are advantages and disadvantages. After reading this, you should get a better understanding of:
- What a merchant cash advance is
- The pro’s and con’s of mca
- Who a merchant cash advance is right for
- Why business shoulders need to be careful with merchant cash advance
- What alternatives you have to cash advance when times is of the essence
How cash advances work
Merchant cash advances aren’t a loan. They are an advance, a payment given against your future income. The merchant cash advance provider is giving you a lump sum, which is then repaid automatically using a percent of merchant account daily proceeds. The % you pay is referred to as the holdback, or retrieval rate. This can be anywhere from 5% to 20%, based on the size of the advance, your credit card sales, and the agreed upon repayment period. Depending on the advance amount, terms for a mca can be as low as 90 days, or as long as 24 months. Repayment begins right after the funds are received.
The amount you borrow is based on your average credit card sales. Most mca providers will look at your receipts over the last 2-6 months in order to determine how much you qualify for. Generally, you can get a cash advance from 50 to 250% of your business’s monthly credit card transactions.