Business Financing Tips

How Is a Merchant Cash Advance Repaid?

If your business needs access to funds quickly to pay employees, buy inventory or equipment, or pay rent or other bills, but you have been turned down by a bank because you have poor credit or no collateral, a merchant cash advance could be the solution you need. You can get access to capital quickly, without having to fill out a lot of paperwork and provide collateral.

You will receive the money quickly, often in a matter of days after you submit your application. The approval process is quick and easy. You can be approved even if you have been denied by a bank because you have bad credit or your business has not been in operation long enough.

With a merchant cash advance, you don’t repay the funds on a fixed schedule in regular amounts like you would with a loan. Instead, the company providing the cash advance is repaid a percentage of all credit card receipts every day until the advance has been repaid with interest.

The length of the repayment period can vary. The average is eight to nine months, although a merchant cash advance can be repaid in as little as four months or as long as 18 months. The higher the percentage of your credit card sales that is used to repay the advance, the shorter the repayment time will be.

Since the repayment amounts are based on a percentage of credit card sales, you will pay less at times when your sales are lower. This gives you more flexibility than you would have with a bank loan, which would require you to pay a fixed amount every month regardless of how much income your business was generating.

UMS Funds can provide your business with a merchant cash advance so you can get the capital you need to help your business thrive. Even if you have bad credit and no collateral, you can still get access to the money you need. Contact us today to learn how we can help you.

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