Many businesses need access to money quickly to make payroll, buy inventory or equipment, or pay for advertising or rent. If you own a small or online business and need access to capital quickly to manage or grow your company, a business cash advance, or merchant cash advance, could be the solution you need. It will give you cash up front in exchange for a percentage of your future credit card sales.
A merchant cash advance differs from a traditional loan because it does not have a fixed repayment plan and a set interest rate. Instead, the company that loans the money collects a percentage of the borrowing company’s credit card sales every month. Merchant cash advances generally come with fees that are the responsibility of the borrower.
One of the biggest advantages of merchant cash advances is the ability to get money quickly. Business cash advances can be processed much faster than bank loans. In some cases, a borrower can receive money within hours of submitting an application.
You can eliminate the hassle of having to fill out and fax, scan, or mail paperwork. The entire application process can be completed online. This can speed up turnaround time.
Traditional lenders, such as banks, are often unwilling to loan money to businesses with bad credit. This can create problems for business owners who need access to capital. Merchant cash advance approval rates are generally higher than approval rates for traditional loans.
If your sales are strong but you have little or no credit, you may not be able to get a traditional loan, but you could be a good candidate for a merchant cash advance. You will probably not qualify for a merchant cash advance if you have filed for bankruptcy in the past, if your business has been in existence for less than a year, or if you are not currently able to process credit card payments for customers.
There is no collateral required for a merchant cash advance. Approval is based on past credit card sales.
Repayment can be easier than with a traditional loan because you will not have to pay a fixed amount every month. This can be helpful if your sales fluctuate.