Merchant Cash Advance Bad Credit

Forget about bad credit, or no credit, when it comes to merchant cash advances from Delancey Street. We understand your business challenges and are here to help you through them. When you’re a small business owner, and have bad credit, getting funding is difficult. 

All hope isn’t lost. You need a merchant cash advance, but have poor credit, or no credit – and that’s totally ok. If you have a merchant account that accepts credit cards or checks, we can help. Merchant accounts are bank accounts where money from transactions are held before they are paid to your business. Merchant accounts are used primarily for helping you accept credit card payments from customers. You can use this same account in order to get capital, in the form of a merchant cash advance.

Most traditional businesses run into funding issues eventually.
Small businesses often have immediate, and spontaneous needs for capital. Traditional bank loans take a lot of time, and paperwork. Often, if you have poor credit history – or no credit history, your loan won’t be approved.

When you get a merchant cash advance, you’re getting a loan based on your credit card transactions. Merchant cash advance providers look at your credit card transaction history and then based on this, decide how much to lend you. This is different from a traditional loan because there’s any collateral involved. The merchant cash advance can be given, even with poor credit, based purely on your business history. The company giving the merchant cash advance is speculating that you will have enough future transactions to repay the cash advance they are giving you, even with zero credit.

From the perspective of a business owner, what you’re doing is selling your future sales in order to get the loan. Unlike a traditional bank loan, your credit history isn’t a factor. Your credit score isn’t checked. You could have zero credit history and still get the merchant cash advance. If your sales are good, you can get the cash advance. If you have a bank account with 5-6 months of statements then you can get a merchant cash advance.

What do you need to qualify for a merchant cash advance with bad credit
Small businesses can use the funds from a merchant cash advance for many things. Below are some common reasons we see people ask for a merchant cash advance:

  • Repairing equipment
  • Expanding business operations
  • Purchasing new equipment
  • Business expansion
  • New location
  • Payroll
  • Pay taxes

Benefits of a bad credit merchant cash advance
There are many benefits of a bad credit merchant cash advance. They are very popular with small business owners, and people with poor credit card history.

  1. The easy application process is a huge reason why people love them. There’s no elaborate paperwork or application process involved. You can just go online, and fill in the necessary documents. Merchant cash advance providers may ask for things like tax returns, bank statements, credit card statements, and other similar items.
  2. Speed is key. Merchant cash advances are processed fast and funded even faster. You don’t have to worry about a long waiting period. Typically, your funds will get deposited within 24-48 hours. Time is crucial when you need funding, and need to pay expenses.
  3. Credit score is simply not a factor. Even if you have a poor credit score that’s ok. Even if your business has no sufficient funds, you can still get a merchant cash advance. The only thing that matters is that you have credit card sales, or activity, in your account.
  4. Repaying is simple and easy. An agreed % of your sales are debited from your merchant account on a daily basis, or some frequent basis. You will only pay a % of your overall sales. This means if your sales volume is low, that’s ok, since you’re only responsible for paying a set % of the sales volume.

Merchant Cash Advances Bad Credit
There’s a common misconception that merchant cash advances cannot be given to people with bad credit, or no credit. That’s incorrect. When a bad credit merchant cash advance company gives a cash advance, they are doing it based on your earnings.

Get Merchant Cash Advances Loans Even With Bad Credit…Here’s How

This is a fact: sooner or later, you will need money to fund your business and grow it. This is simply put, a fact of life. It doesn’t matter what type of business you own, how lucrative your industry is, or anything else. You need money to grow. The good news is, small business owners have options – especially if you have revenue coming in. If you have bad credit, then it’s hard to get a business loan, and funding. But, if you have a stream of revenue – it’s possible to get a merchant cash advance (MCA). Bad credit doesn’t mean you have a bad business, or a failing business. It just means somethings happened which have harmed your credit score. But you might have an otherwise profitable business. The good news is, you have options, and can get a merchant cash advance. Slow paying customers can be a huge problem, and put the brakes on an otherwise successful business. Sometimes, bad credit comes from things you can’t control. Anyone whose made it through tough times, like the market crash of 2008 – can speak to this. It’s easy for tough times to cripple you. When that happens, a merchant cash advance can help. You can get it, even with bad credit.

What’s a merchant cash advance

This is a tool to grow your business. Like any loan, or financial instrument, it has it’s benefits and drawbacks. Before you reach out for a merchant cash advance, you need to be aware of how it works, and consider the pro’s and con’s. Merchant cash advances aren’t based on your business credit. You will qualify for a merchant cash advance as long as you have a recurring debit, or credit, sale. The more credit card business you have, the larger the cash advance can be. It’s important to know that the more business you have, the greater the merchant cash advance can be, and the more you can borrow. The good thing about merchant cash advances is the fact you don’t have to actively make payments. You agree that a fixed % of the revenue is withdrawn from your future credit card transaction deposits. This money goes straight to merchant cash advance company giving you the cash advance.
You can choose to make the money withdrawn on a daily, weekly, or monthly basis. This is negotiable, and depends on your typical operations. The good thing about this withdrawal structure is that it makes it affordable and custom to your unique business.

Merchant Cash Advance can help even if you have poor credit
Business credit is super important in life. The better your business credit is, the easier it is to get a small business loan in the future. In addition, the lowest your interest rate will be. Most lenders hate risk, and they want to make sure you can repay the loan you take. If you are “risky,” they will turn you down, or give you harsh terms. Bad credit can, and will, hinder your business when you need money. With that being said, you CAN get a small business loan with bad credit if you opt for a merchant cash advance. You’ll end up paying more money to borrow the money, but you’ll have it quickly. You can use the money however you want – which is extremely valuable in a pinch.

The better your business credit is, the better terms you can get from people who are suppling you with goods and services. If your business credit is bad, then vendors will often ask you to pay cash up front. This can be a huge burden on your cash flow situation, but if a supplier sees a good credit rating – then they’re likely to give you the credit you need. Bottom line, good business credit will open doors for you. You can borrow more money, at cheaper rates.

How to fix your bad credit
The best way to build credit is borrow money, and pay it back timely and in full. Merchant cash advances are an opportunity to borrow money, even with bad credit. Compared to small business loans, it’s easier to repay a merchant cash advance. The quickest way you can get back on your way to good credit is to pay your debts consistently, in full, on time. Decrease your business credit card balance, which will have an immediate impact on your credit rating. It will reduce your debt ratio, and increase amount of available credit. Make an effort to pay bills timely. In some cases, it might behoove you to pay “earlier” than needed, just to make sure it’s paid.

Alternatives to merchant cash advance bad credit
If you feel the cost is too high, and you have “time,” on your side – then below are some great alternatives to mca.
Term loans: This is a loan similar to a mortgage. You borrow a set amount, and repay it over a period of time. Rates can be either fixed, or variable. The term loans can be secured or unsecured. The APR on a term loan is favorable compared to a credit card or mca. Your repayment term can last anywhere from 12 months, to 5 years.
Business credit cards: Business credit cards are great ways to cover expenses while earning points which can be used for travel or cash back.

What’s a holdback
When it comes to mca, “holdback” isn’t a very popular term. It means the % of the daily credit card sales which are applied to your mca. The holdback amount is the % of daily credit card sales are going to be used to repay the loan until it’s fully paid back. The holdback % is somewhere between 10 and 20%. It’s usually a fixed amount until the mca is completely paid back.
Because the repayment is based on a % of the daily balance in your merchant account, the more money you make – the faster you can repay the cash advance. If on any given the transaction are lower than expected, then the draw from the merchant account will be less. What this means is that payback is relative to the incoming money coming to the merchant account.

What’s the difference between holdback amount and interest rate
There’s a substantial difference. Most MCA providers charge a “factor rate,” which is the interest rate. Unlike traditional loans, a rate isn’t amortized over the course of cash advance. The typical factor rate for an MCA can range between double and triple digits.

Is a bad credit merchant cash advance right for you
A merchant cash advance can make sense if your business needs money fast in order to pay bills, or take advantage of an opportunity. It’s important that you take into account the costs of the mca.

How can you repay a merchant cash advance?


Businesses who are looking to improve their cash flow can get a merchant cash advance. The cash advance has three general repayment methods

Split withholding
Lock box
ACH withholding

Split Withholding
This is the usual method of repayment. It’s done electronically and fast. It’s when collection is done via the credit card processing company. The processing company automatically splits the credit card sales between the business owner and the company providing the merchant cash advance. The % paid to the merchant cash advance company is agreed upon beforehand.

Lock box / Bank Account withholding
In this method, the credit card sales and revenue is credited to a business bank account where the money is split, and portions are automatically forwarded to the lender. The balance is sent to the business owner. This method can be disadvantageous to the business because there is a 1 day delay in getting the funds from the credit card sales. Lock box repayment is a longer, and more complicated process, than split withholding. Most business owners don’t like it because of the delay involved.

ACH Withholding
It is also known as ACH withdrawal. ACH stands for automatic clearing house, and is a popular method. In this method, a merchant cash advance company gets the credit card processing information and then deducted a pre-agreed portion via a checking account through ACH.

Can you get a merchant cash advance even with bad credit?

The answer is definitely: YES! Merchant cash advances are given due to the success of the business. As a lender, we’re looking at how much revenue your business generates first and foremost. As a result, when you contact us for a business cash advance – we’re looking at your revenue, rather than your personal credit. We look at the ability of your business to repay the funds, as opposed to looking at your personal capability of repaying the funds.

How long does it take for a merchant cash advance to be funded?

Merchant cash advances can be funded in 24-48 hours, even if you have bad credit. At Delancey Street, we have a completely online application process, which makes applying almost instant. It’s not uncommon for borrowers to get an answer in 6-12 hours.

How much funding can you get with bad credit?

Your credit doesn’t usually change how much funding you can get. Regardless of how bad your credit is, you can still get the full amount of funding your business would qualify for.

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