Small businesses that quickly need capital are best fit for a Merchant Cash Advance, also known as MCA. Instead of a traditional small business loan, Merchant Cash Advances represent sums of money repaid with an amount of interest. You may be thinking this sounds just like a loan, but a company that collaborates with your small business provides an Merchant Cash Advance.Instead of a fixed form of repayment, similar to a traditional loan, it corresponds to the credit card sales of the business. The lender works as a team with the business and collects the agreed-upon percentage from each credit card transaction until fully repaying the advance. This collection method allows business owners to have immediate access to funding while personally working with a company.
Merchant Cash Advance Pros
As a small business owner, it is important to assess whether the terms, costs and potential impacts associated with a merchant cash advance are a good fit as the right solution for your business.
Fast Funding
The largest benefit that comes with a merchant cash advance is immediate access to funding.The simple application process and cooperative companies allow business owners to receive financing much faster than a traditional loan. In the business world, time is everything, and this option allows business owners to take advantage of time-sensitive opportunities and tackle cash flow issues.
Flexibility
Another pro is the flexible repayment structure. Unlike typical business financing, repayment is based on an agreed-upon percentage of sales. There is flexibility during times of fluctuations because if sales are slow, the repayment adjusts accordingly. Additionally, there are no late charges as repayment is performed automatically.
No Collateral Needed
Unlike a traditional bank loan, your assets are not at risk, and a business is not required to use them as collateral, removing legal liability. Rather than focusing on assets and taking a hard credit score pull, merchant cash advances accept a larger range of credit scores. This provides a massive advantage for businesses with credit challenges as lenders focus on different aspects of a business such as revenue potential or credit card sales.|
What is a Merchant Cash Advance?
Small businesses that quickly need capital are best fit for a Merchant Cash Advance, also known as MCA. Instead of a traditional small business loan, Merchant Cash Advances represent sums of money repaid with an amount of interest. You may be thinking this sounds just like a loan, but a company that collaborates with your small business provides an Merchant Cash Advance.Instead of a fixed form of repayment, similar to a traditional loan, it corresponds to the credit card sales of the business. The lender works as a team with the business and collects the agreed-upon percentage from each credit card transaction until fully repaying the advance. This collection method allows business owners to have immediate access to funding while personally working with a company.
Merchant Cash Advance Pros
As a small business owner, it is important to assess whether the terms, costs and potential impacts associated with a merchant cash advance are a good fit as the right solution for your business.
Fast Funding
The largest benefit that comes with a merchant cash advance is immediate access to funding.The simple application process and cooperative companies allow business owners to receive financing much faster than a traditional loan. In the business world, time is everything, and this option allows business owners to take advantage of time-sensitive opportunities and tackle cash flow issues.
Flexibility
Another pro is the flexible repayment structure. Unlike typical business financing, repayment is based on an agreed-upon percentage of sales. There is flexibility during times of fluctuations because if sales are slow, the repayment adjusts accordingly. Additionally, there are no late charges as repayment is performed automatically.
No Collateral Needed
Unlike a traditional bank loan, your assets are not at risk, and a business is not required to use them as collateral, removing legal liability. Rather than focusing on assets and taking a hard credit score pull, merchant cash advances accept a larger range of credit scores. This provides a massive advantage for businesses with credit challenges as lenders focus on different aspects of a business such as revenue potential or credit card sales.
