What is a Merchant Cash Advance?

A merchant cash advance is a type of funding that you get in exchange for a percentage of your credit or debit card sales. A merchant cash advance is not the same thing as a loan. Many people turn to merchant cash advances because they are unable to qualify for other types of funding. Additionally, they may get a merchant cash advance because they need funds quickly.

How a Merchant Cash Advance Works

You will have to apply for a merchant cash advance. After you are approved, you will receive your funds. The merchant cash advance provider will take a portion of your daily sales. They will typically take 5 to 20 percent of your daily sales.

The term length will depend on the amount of money that you had advanced. Terms typically range from 90 days to 18 months.

Types of Companies That can Benefit From A Merchant Cash Advance

Startup Companies

There are two financial problems that you may run into if you have a startup company. It may be hard for you to maintain a consistent cash flow during the first few months of your business. Your business can also grow rapidly during the first few months. This means that you will have to hire new people and buy new equipment.

Additionally, you will need to advertise your company. You can get a merchant cash advance to handle all of your startup expenses.

Commercial Real Estate Companies

Any type of commercial real estate project will require capital. You can get a merchant cash advance to redevelop land. You can also use a merchant cash advance to refinance your property.

Restaurants

Most restaurants experience fluctuations in cash flow. That is why restaurants often turn to merchant cash advances. Restaurants also use merchant cash advances to expand their services and hire new staff members.

Retail Stores

Like restaurants, retail stores also experience fluctuations in cash flow. A merchant cash advance can ensure that a retail store is able to keep its doors open even when sales are down. Retail stores use merchant cash advances to stock their shelves and hire more employees during the busy times.

Benefits of Merchant Cash Advances

No Collateral is Required

You will not have to worry about losing your property, business assets or home. You do not have to put down any collateral to get a merchant cash advance.

Credit Does not Matter

Most lenders require that you have good credit to get any type of funding. However, you can get a merchant cash advance if you have bad credit or no credit at all.

Quick Funding

You will not have to worry about waiting weeks to get the funding that you need. Your application will be processed in just a few hours. You can also get your funds in just 48 hours. You are free to use your funds for whatever you need after your money is deposited into the account.

Save Your Business

Business may be slow, but the expenses will keep coming. You also have staff members who have to be paid. A merchant cash advance can keep your business operating when times are slow.