Massachusetts Merchant Cash Advances
A merchant cash advance differs from a business loan because a loan is based on past sales history whereas a merchant cash advance is based on projected credit card receipts. Business owners can apply online for a cash advance and normally have the funds deposited into their account within 24 to 48 hours. We use direct deposit in order to expedite the process so that you’ll get your funds as soon as possible.
Our cash advances range from $2500 to $250000, depending on your credit card sales, and they are repaid daily from your merchant account. We have a 1.14 to 2 percent factoring fee and we don’t check your business credit.
Pros And Cons Of A Merchant Cash Advance
There are several advantages to using a merchant cash advance rather than obtaining a business loan. Those advantages include:
- Approval is easy
- Bad credit is okay with us
- Quick access to your funds
- Good for those with no alternative
- Suitable for many types of businesses
Some of the drawbacks to merchant cash advances include:
- Diminished daily cash flow
- Higher fees than a traditional loan
- Can be very expensive money
- Advance must be repaid in full before you can change merchant service providers
How A Merchant Cash Advance Works
A merchant cash advance is a quick way to raise funds when you have an immediate need for cash but not the time to apply for a traditional loan. If you have bad credit, it’s also a good way to access needed funds. Since it’s not a traditional loan, there’s no credit history involved, simply proof of your average credit card receipts. Your cash advance will be predicated on that alone and the payments will be deducted from your business account every day. Repayment can take as little as 90 days or up to 24 months and start immediately upon receipt of the funds. You can usually obtain from 50 to 250 percent of your monthly credit card receipts.
Merchant Cash Advance Benefits
There are several benefits to obtaining funds through a cash advance rather than a traditional loan.
- Simple and easy application process: You can apply and upload supporting documentation online at your convenience, and it takes only minutes.
- Bad credit is okay with us: We don’t care if you have good credit, bad credit, or no credit. All we need is proof of your credit card sales. Using a merchant cash advance will not affect your credit.
- You don’t need collateral: Traditional loans require collateral and take longer to process.
- Fast funding: One of the most attractive benefits of a cash advance is the quick access to your funds. You’ll have a decision within hours and your funds will be available quickly.
- Repayment is flexible: Your repayment terms will be a percentage of your credit card sales rather than a set amount that might cause additional cash flow problems.
- Higher limits than a loan: Your cash advance can be as little or as much as you need based upon your credit card sales. Cash advance providers have significantly more latitude than lenders.
Good Candidates For A Merchant Cash Advance
Restaurants and retailers or new businesses that haven’t built a solid credit history can be great candidates for merchant cash advances.
Who Should Be Careful
Although a merchant cash advance has great benefits, it can be very expensive money and should only be used when there’s no alternative.
What’s A Factor Rate?
Traditional loans use an annual percentage rate, or APR, for their loans. Cash advances use a factor rate, which is the percentage that must be repaid to the lender. Combined with the holdback rate, the total amount repaid can be significantly higher than the original factor rate would indicate.
What’s Meant By The Term Holdback?
The percentage of daily credit card receipts that will be used to make the daily payment is referred to as the holdback and can vary from 10 to 20 percent.
Alternatives To A Merchant Cash Advance
If you need funds but have some extra time, you could use a business credit card or obtain a term loan. Both are considerably less expensive than a cash advance but may take longer to obtain.
Is A Merchant Cash Advance Right For Me?
A merchant cash advance can be an excellent source of ready cash for those who have no alternative. However, it’s an expensive type of ready cash that should be used when no other options are available.