How you can use a small business loan

Small business owners can use loans to grow their business. You can use the funds however you wish.

Cover Expenses

Pay for any unexpected expenses that arise.

Invest in your business

Use the loan to grow your business however you wish.

Payroll

Use the loan to pay your employees.

Liquid

Keep the cash on hand for future expenses.

Equipment

Buy new equipment to grow your business.

Staff

Use the loan to hire new employees.

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24-48 Hours

Loans up to

$10 Million

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Delancey Street Can Help

We're committed to building relationships and helping people all over the USA get access to the RIGHT loan for them. Regardless

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Easy Application

Our app process is super easy. All it takes is one application, and we handle the rest for you.

Service

Service is key. You can ask for advice on ANYTHING and we'll bend over to help.

Experts

Many of our team members are former business owners, and understand your challenges.

Customized

We customize each loan for you, and to your unique specs. Everything is customized.

Universal

We help virtually any industry, any business, anywhere in the USA. It doesn't matter.

Nationwide

We fund business loans nationwide. It doesn't matter where you are, we can help you.

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This is crucial, and critical. We are 100% honest with our clients, and never strive for less.

Hear from people we’ve helped

“Delancey Street funded our e-commerce shop and really gave us the chance to grow our business significantly.”

- Leena, VP of Sales at Waist Karma

When business loans or other more traditional business financing is not available, you might consider a merchant cash advance, or MCA. If you are considering this route, you should understand how it works, when these are used, what they cost and the reasons for the costs.

How Does a Merchant Cash Advance Work?

In a merchant cash advance, the financing entity or lender furnishes the business money. In exchange, the business allows the lender to take a percentage of the credit card sales as payment until the entire debt is repaid.

The mechanism for repayment comes through a “holdback.” In this method, a certain percentage of the credit card sales is retained to pay on the loan rather than being applied to other expenses of the business or retained as profits. This can range generally between ten percent and 20 percent of the credit sales.

As such, level of sales from credit cards determines how quickly you repay a merchant cash advance.

When considering an MCA, you need to be aware of changes in the economy or in the area where you conduct business. These occurrences may lessen anticipated sales. They might include plant closures that cost jobs, suppress use of credit cards for items not considered essential like a restaurant visit, and less customers. Inclement winter weather or hurricanes can close businesses such as restaurants or gas stations that rely heavily upon in person patronage.

For Whom is a Merchant Cash Advance Best Suited?

Since an MCA relies upon credit card sales for payments, these financing arrangements typically work best for businesses with high volumes of credit card sales. Thus, you may be a good candidate for an MCA if you own or operate a restaurant, convenience store, gas station (especially one with pay-at-the-pump capability) and other merchandise stores.

The quick turn around in approval of MCA requests make this approach appealing if you need funding fairly quickly. For example, you might need a quick infusion of cash to purchase inventory that has been depleted quicker than expected or to meet a higher than anticipated demand. A situation calling for sudden repairs or to finish the preparation for an opening may also call for this sort of financing. MCAs may prove handy when a can’t-pass opportunity presents itself and funding through a traditional loan takes too long to process.

MCAs often assist businesses that have difficulty obtaining traditional bank financing. If you are an infant business or if previous difficulties have lowered your business credit score, the MCA affords an alternative for you without having to meet more stringent credit requirements.

What Does an MCA Cost?

Overall, MCAS typically cost more than bank loans. This is because the security for an MCA loan is not physical assets such as equipment or land, but our sales. As such, the higher cost of an MCA takes into account the uncertainty of future sales and the potential for volatility in the local or national economy or in a particular industry or business.

Speaking of cost, MCAS are priced based upon a factor rate. It reflects the future value of the revenues to be used to pay back the advance. Unlike a traditional loan, an MCA does not come with and amortization schedule where You Are ultimately paying down principle based upon a set monthly payment.

Should You Consider an MCA?

Even in situations where you need cash quickly or can’t qualify for more traditional financing, you may not have to see MCA as a last or only resort. These loans come with relatively high costs. With credit card receipts being the basis for payments, you may have very few options if the sales do not accumulate as needed or as you hope.

You might find as alternatives short-term loans, which often lasts a few months. This can bridge you through a period in which you need cash fairly quickly, but you’re not having to rely upon credit card sales. Also when you get a loan, even if short, you are building your business’ credit rating and score with making payments. MCAS, because they’re not loans, do not offer this feature.

Ultimately, whether you choose in MCA were some other approach will depend upon your need for cash to seize upon an opportunity and the prospects that you will have sufficient sales to pay for an MCA.