Merchant Cash Advance is technically not a loan. They are considered cash payments in exchange of future receivables. A merchant's deposits are drawn on a daily basis until the obligation has been met. For example, a business sells $20,000 of a portion of its future sales for an immediate advance of $10,000 from a Merchant Cash Advance company. The company then collects its portion (generally 15-30%) from every sale or deposit until the entire amount of $20,000 is collected.
Why Opt for a Merchant Cash Advance?
1) They’re Quick.
Merchants can often get a Merchant Cash Advance within a few days or a week with minimal documentation. Merchant Cash Advance companies look at the merchant's daily receipts to determine if the merchant can repay.
2) Minimal Requirements.
Typically the financial data provided by a merchant is minimal: 3 to 4 months of bank statements, and a copy of the merchant’s lease agreement.
3) No Collateral Required.
Other than the sales or deposits into the business checking account, no collateral is needed to get a Merchant Cash Advance. Many merchants lose their assets because they put their assets up against their bank loans. If they default on the loans, the banks can claim those assets, leaving the merchants with nothing left to back their businesses.
4) Freedom to Utilize the Money.
A merchant cash advance comes with few restrictions as to how the money can be used. Loans from banks generally require a merchant to use the cash for a specific purpose, such as to buying equipment, making payroll, marketing and advertising. However, a Merchant Cash Advance can be used as the merchant deems fit. The money is the merchant's to do with as they please. This merchant does not have to account to the provider for its use.
5) Merchants with Less Than Optimal Credit are Accepted.
A history of bad credit can prevent merchants from getting funding from a traditional lending sources like banks. However, one of the advantages of a Merchant Cash Advance is that merchants with bad credit can still be accepted, even if their credit scores are below 550. The merchant does not need a high personal credit score to get a Merchant Cash Advance, but higher scores can lead to bigger advances and better terms.
6) Higher than Typical Approval Rates.
A Merchant Cash Advance is perfect for small businesses who may have been turned down for traditional loans by banks and other lenders. Generally, the approval rates are high from providers offering merchant cash advances. This means higher chances of securing the capital that the merchant needs.
7) Repayments are Generally Easier Over Time.
Besides a simple process to get a Merchant Cash Advance, the collections process too is fairly straightforward. A Merchant Cash Advance payback is based on the deposits that they receive. Meaning, when merchants generate more revenue in a particular month they can payback more, and if the deposits slow down the payback amount is less. This percentage-based repayment policy allows a business to grow instead of draining or stressing its funds. Also, the business owner is not personally liable to pay back the Merchant Cash Advance if the business goes bankrupt. Unlike many small business lending options, the merchant is not personally liable for the Merchant Cash Advance.
When applying for a Merchant Cash Advance with www.merchantcashadvance.business, you will enjoy all of these advantages. Click here to see if you qualify or call 1.855.227.6168 to know more how your business can benefit from a Merchant Cash Advance.