What Should You Know About a Business Merchant Cash Advance?

Small businesses are turning towards alternative financing options because acquiring traditional bank loans is not only tedious but also time-consuming. The business merchant cash advance is one of the best alternative sources for small businesses that need funds quickly to keep up with business expenditure. Raising additional working capital is easy with merchant cash advance loans and the funds availed can be used for any purpose. The loan can be availed by a small business that is into trading and uses card processing terminal for accepting payments towards the sale of the products and services. The business should have a merchant account for more than six months to acquire the fast cash loan.

business merchant cash advance

Merchant cash advances have several advantages over other types of loans that are available on the market.

Advantages

  •    The loan amount can be anything from $2500 to $300,000
  •    The approval rates for the merchant cash advances are high and are up to 90%
  •    The repayments are flexible and are customized to the business requirements
  •    These fast cash loans are unsecured and are free from collaterals
  •    The funds are directly deposited into the business account within 7-14 days of approval
  •    Ideal finance option for small businesses
  •    The loan can be repaid with the existing merchant account and no need to move the merchant services.

How does the fast cash loan work?

The business merchant cash advance is approved based on the credit card sales of the past 12 months of the borrower’s business. The lender collects the entire information of sales over the past months from the merchant account provider of the firm. The lender then calculates the loan amount based on the information acquired from the merchant account provider. The amount is an average of the total sales in the past one year of the business.

A merchant cash advance can be termed as an unsecured business loan which is collateral free and is not backed by any security. It is entirely independent of credit scores, the credit rating of your business and banking facilities.

Repayment Terms

Repayment of the merchant cash advances are not fixed and are highly flexible. The repayment amount is fixed as a percentage of sales for a particular period, generally daily basis. Hence the borrower is not burdened to repay the loan amount when there are no or low sales for that period. The lender collects the repayment amount from the merchant account provider of the borrower where the later is instructed to hold back the repayment amount agreed in the account, and the balance is remitted to the business account of the borrower.

Who can Qualify?

  •    The small businesses that have been trading for more than six months can be eligible for the merchant cash advance fast cash loan.
  •    The monthly credit card sales should be more than $2500 on an average.
  •    A business plan with realizable goals and sales target

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