Could your business use extra cash flow? Could extra cash make your company operate more efficiently? If so, a merchant cash advance could be the way to gain access to the funds you need to buy inventory, pay for operational expenses, or make capital improvements to your organization.
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.