DELANCEY STREET

Here's Who We Are

We're Fund Virtually Everything

We fund business owners nationwide, regardless of industry, credit, or time in business. We fund it all.

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We Provide Multiple Options

We have a lot of different financing options available to our clients. Regardless of your situation, we’ll have a solution for you.

Fast Approval

Our application process is completely online. You can get funds in your bank account in literally 24 hours.

The Working Capital You Need In 24 Hours.

We get you funding. It's that simple. Regardless of credit, income, or time in business - we'll fund you.

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Use our online form or call toll-free anytime to get started. There's no cost, and the application takes only three minutes.

Approval

Receive application approval in as little as 24 hours. There is no credit check required.

Receive Funds

Review and return your signed agreement and get your money in as little as 24 hours.

Recent Business Loans Funded

100K Term Loan

Ambulance Service

Our client bought a new ambulance.
2019 - June
55K Advance

Truck Funded

Our client used the funds to hire new team members.
2019 - February
85K Term Loan

Restaurant Funded

Our client used the funds for restaurant equipment.
2019 - May

Get a Decision in as Little As 30 Seconds

We’re Fast. We Help Regardless of Credit. WE HAVE A SOLUTION FOR YOU.

Apply Online

We have a completely online application process, which is simple and easy.

Get Offers

We'll match you with the best loan offers we have that are financially responsible.

Get Funded Quickly

We'll fund you the same day you accept our offer.

How Delancey Street Works

Fill Out Our Application

Answer basic questions about yourself and fill out our entirely online application. Each loan has its own online process.

Meet Your Concierge

We'll pair you with an experienced Delancey Street specialist who will reach out to you, and understand your needs. We'll try to determine which financial product is right for you.

Compare Our Loan Offers

We give you a few different loan offers based on your scenario and what options you qualify for.

Choose Your Loan

Once you've chosen a loan that works for you, we finalize it and start getting the documents needed.

Get Funded

Once we get all of the documents back, we'll get you funded ASAP.

We Help You Grow

After you get funded, your Delancey Street concierge specialist will keep in touch to make sure you're happy and doing well.

Business Loans

Get business loans ranging from 3 months to 18 months
No credit score requirement, we have a program for everyone
We can fund up to $5 million in virtually 24 hours

Merchant Cash Advance

Are you in need of urgent funding? Merchant cash advances could be right for your business. This article is going to talk to you about what a merchant cash advance is, if it’s a good deal or not, and what that cash REALLY costs you. 

With merchant cash advances, a lender is advancing you cash against future receivables, and deposit it directly into your business account. Typically, business owners can get a merchant cash advance in literally 24 hours.

how easy is a merchant cash advance loan

Here’s what you’ll learn in this article

  • How merchant cash advances work
  • The cost of a merchant cash advance
  • Why borrowers choose to get one
  • Reasons you should be careful
  • Alternatives to MCA’s

Pro’s of Merchant Cash Advances

  • Straightforward approvals
  • Quick access to cash
  • Bad credit friendly
  • Great for virtually all businesses

Con’s of Merchant Cash Advances

  • Higher cost than traditional business funding options
  • Repaying it can reduce your daily cash flow

merchant cash advance rates

How do merchant cash advances work

Merchant cash advances have historically been for businesses whose revenue come from credit card sales and debit card sales. Merchant cash advances are available to other businesses that don’t rely heavily on credit card sales as well. Merchant cash advance lenders say their product isn’t technically a loan. These funding instruments can be structured in two ways.

  • You can get an upfront sum of cash for a slice of the future sales. You can also get upfront cash that is repaid by remitting daily/weekly debits from your bank account.

Instead of making one fixed payment every month from a bank account, with a merchant cash advance you make daily or weekly payments, plus fees, until it’s repaid.

How much you pay in fees is determined by your ability to pay the merchant cash advance. Typically, lenders charge a factor rate – ranging from 1.2 to 1.5 based on its risk assessment of you. The higher the factor rate, the higher the fee you pay. Typically, to calculate your payback you multiply your funded amount by the factor rate.

Percent of credit card sales

The merchant cash advance provider automatically deducts a % of your future credit card sales until the agreed upon amount has been repaid in full. The repayment period usually ranges from 3 to 12 months. The higher your credit card sales, the faster you can repay the merchant cash advance.

For example, say the merchant cash advance provider is deducting 10% of your monthly credit card sales. They will continue to do this until you’ve repaid the $70,000. If your restaurant averages $100,000 in revenue per month, you’d repay $10,000 monthly. This means a daily payment of $333. At this rate, you’d pay off the advance in 7 months. If your revenue dropped to $70,000 per month, you wouldn’t repay the merchant cash advance until the 10th month.

Fixed daily withdrawals

This kind of merchant cash advance agreement has a daily or weekly payment to be withdrawn.

why do people like merchant cash advances

Why do borrowers choose for a merchant cash advance?

Although merchant cash advances an option of last resort, they do have some benefits.

  • They are quick. Often, you can get an MCA within 24 hours, with little to no paperwork. Provides will look at your credit card receipts to determine if you can repay it.
  • You won’t lose your home. MCA’s are unsecured financial instruments, so you don’t need to provide collateral. It means you don’t have to forfeit any personal or business assets. If the company goes out of business, you don’t need to worry about paying it off.
  • When sales are down, you payment goes down too. When your repayment schedule is a % of your daily credit card sales, the repayment is adjusted based on how well or poorly your business is doing.

merchant cash advance loans

Reasons to be wary about merchant cash advances

  • Your APR can be in the triple digits. The annual APR, the borrowing cost, with fees and interested included, ranges from 40% to 350% depending on who you’re borrowing from. This is more expensive than traditional business loans, where the APR is 10% or less. Business credit cards usually have an APR from 12% to 30%.
  • There’s no early repayment benefit. Since you must pay a fixed amount, you get no savings from early repayment.
  • No federal oversight. The MCA industry isn’t subject to federal regulations because MCAs are structured as transactions, not loans. They are regulated by the Uniform Commercial Code in each state, not banking laws.

Merchant cash advances are a popular go-to solution

The speed come with a huge price. In this article, we’ll break down everything you must know about a merchant cash advance. These financial loans are a type of business cash advance against your future revenue. You get a lump sum amount of cash, which you then pay back with a % of your daily sa.es The merchant cash advance is designed to help your business with short term financing needs – that need to be funded FAST. They are less stringent than traditional loan, and are a common option for newer businesses. 

How does a business cash advance work?

You apply for it online, and in a matter of minutes get approved. You get a lump sum of cash, in exchange for a portion of your future credit card receipts. This repayment begins almost immediately after you take the money. The typical advance is between $3000 and $300,000. Depending on how much you borrow, the repayment period can be as little as 120 days, or as long as 24 months. The average term of a merchant cash advance is 8 to 9 months. The merchant cash advance lender determines how much you’ll need to pay back by looking at your monthly credit card sales. Other factors a lender looks at, is time in business, your industry, and other factors. 

Typically, you can figure out what you’ll owe by multiplying your loan amount by the factor rate. For example, if you get $40,000 – your total repayment would range from $44,000 to $60,000. The % of your daily credit card sales that a merchant cash advance lender takes is called the holdback. This range from 8% to 30%. The provider takes a predetermined % of your daily sales directly out of your account until the entire principal and interest is paid back. 

Merchant cash advance terms

Factor Rate: This helps you understand how much you will pay back

Holdback Rate: % of your daily sales that the lender will take until you pay back what you borrowed. 

Pro’s and Cons of Merchant Cash Advances

Here are some benefits of an MCA. 

Pro #1: Quick

When you need capital fast, a merchant cash advance can deliver the funds you need. You can be approved in literally a few hours, and have the funds in your bank account. 

Pro #2: Easy to Qualify

With most lenders, you need a credit score over 700. MCA providers tend to be concerned with your daily sales and credit card processing volume. This means even credit scores as low as 500 can be eligible for financing.

Pro #3: No Collateral

Some types of financing require a business owner to offer collateral. This can be land, equipment, or other assets. Merchant cash advances are unsecured, which means no collateral needed. Some MCA provides will require a personal guarantee, which means your business, and perhaps personal, belongings are at risk. 

Pro #4: Flexible Payment

You pay based on how much you’re generating in revenue. If your revenue goes down, the % repayment goes down. If your revenue goes up, the % repayment goes up. 

Pro #5: High Borrowing Limits

Merchant cash advance lenders lend you up to 250% of your credit card sales. If you can prove consistent sales, chances are you’ll qualify for a larger merchant cash advance.

 

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
Leo
$125,000 Small Business Loan
"Thanks for funding me in literally 24 hours"
Jason
$35,000 Lawsuit Advance
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$250,000 Hard money Loan

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