What is a Merchant Cash Advance?

In the world of small business ownership, you may find yourself short on working capital and struggling with bills at times. Unfortunately, taking a long term loan out for your current needs is not always the most feasible of financing options, but what else can you do? Luckily, there is a type of product financing called a Merchant Cash Advance (MCA).

A merchant cash advance is perfect for a business that requires cash fast and receives a fair percentage of their revenue from credit card and debit card sales. Of all the financing options we offer here at AdvancePoint Capital, an MCA is the fastest. Your business can get cash faster than ever before.

Because of how it is funded, a merchant cash advance is not considered a business loan. It’s simply an advance on the cash revenue that you would likely be making in the future based on your recent and past sales and revenue.

The merchant cash advance is also known as a business cash advance. Small business owners can raise money quickly by selling a portion of their future debit card sales and credit card transactions at a discount to a funder in exchange for immediate cash for the business. It’s a great way to receive the cash advances you need to keep your company running smoothly. The repayment method of the cash flow you receive can be determined by the lender, but it is typically either automatically withdrawn from your bank account as a percentage of your daily credit card transactions and debit sales, or it is withdrawn from your daily deposits in your business account. This percentage is commonly referred to as a factor rate. Regardless, you’re able to complete your payments without needing to take extra steps.

Features and Benefits 

AdvancePoint provides merchant cash advance services for businesses that can’t turn to traditional business loan options. We take pride in offering: 

  • Cash advances ranging from $10,000 up to $500,000
  • Cash advances regardless of personal credit score 
  • Speedy approval processes 
  • The perfect solution for businesses who get their revenue from debit and credit cards 
  • No term limits 
  • Flexible payment options of a percentage of future sales (instead of daily or weekly lump sum payments)
  • Easy and quick application process

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

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Merchant cash advances are a great way to receive cash flow fast, without needing to fuss around with banks or slow lenders. Furthermore, a business loan is a tough code to crack without the right personal or business credit score. The system can be tedious and eventually devastating for small businesses that need cash advances quickly. With AdvancePoint Capital, you’re able to speed up the process with alternative finance options that work for you.

We’re here to partner with your business and help you navigate the challenging financial roadmap. Choosing between the various cash advance lenders can be a nightmare. However, we’re all about empowering businesses like yours with premiere merchant cash advance services. For companies with fantastic sales projections, a merchant cash advance provides a friendly avenue toward success.

How Do Merchant Cash Advances Work?

A merchant cash advance enables you to receive the funding you need fast. Most business loans have roadblocks or long waiting periods that prevent owners like you from receiving the cash you need. However, here at AdvancePoint, we provide unique avenues toward capital for business owners like you. If you’ve spent too long waiting around for traditional loan methods or are worried you may be denied — a merchant cash advance can help. An MCA works by allowing businesses the ability to leverage their future credit card transactions or debit card sales in exchange for instant capital.

How? Well, in return for the cash advance you’ll agree to pay back the lender a percentage of your daily credit card revenue. For a business that receives a good chunk of its sales from credit card or debit card sales, or receives a significant amount of credit card processing — a merchant cash advance makes sense. You’re able to obtain a lump sum of cash that you need now in exchange for that percentage of the daily credit card revenue. Merchant cash advances are ideal for a business that needs cash right away. While it’s one of the more costly options, it is by far the fastest way for a business to obtain cash in 24 hours or less.

Merchant Cash Advance and Factor Rates

During your journey to obtain a merchant cash advance, you’re going to run into the term “factor rate.” A factor rate isn’t expressed the same as an interest rate (which would be percentages). This factor rate is typically a decimal of around 1.1 to 1.5. These indicate how much you will be paying back on your business loan over time. An MCA is not a term loan, so the factors that go into obtaining this quick cash solution are different.

This repayment method is flexible and works to get you the cash you need fast. It’s attached to your future sales, making it perfect for a business that needs a cash advance fast. The future payments fluctuate until the cash advance terms have been met, so the amount taken out depends on your company sales. Give yourself some peace of mind and make your payment on your own terms. So, if you have slow sales, don’t worry. You don’t need to pay a fixed amount that day and can rest easy with your merchant cash advance. However, because this product does not have a fixed term, you don’t need to worry about daily or weekly payments (except for what’s deducted from credit card sales).

Due to this unique repayment process, approval qualifications through AdvancePoint Capital are easier than traditional business loan financing.

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To qualify, business owners must have:

  • Their credit score run. Although due to the repayment terms, merchant cash advances through AdvancePoint Capital can be approved for credit scores that are Mid-Prime to SubPrime, including scores as low as 500.
  • A minimum of 6 months in business with a record of revenue for those months.
  • Business bank statements, although this loan allows for lower average daily balances in your statement and also allows for some Overdrafts/NSFs in your statements.

Merchant Cash Advance

Eligibility Requirements: 

Application: A simple one-page application 

Paperwork: Provide most recent Merchant Processing Statements and/or Business Bank Statements showing consistent cash flow. NO TAX RETURNS REQUIRED!

Credit: All credit types considered from excellent to poor

Time in Business: In business for a minimum of 6 months. NO START-UP BUSINESSES

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

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Who Can Qualify for a Merchant Cash Advance?

A merchant cash advance is far easier to qualify for than a traditional business loan. Even though the terms for approval are more lenient, there are still restrictions on this type of cash advance. This type of advance is perfect for business owners who heavily rely on credit card or debit card sales for their sales deposits. This type of company is what lenders are looking for because this reduces their risk in the long and short-term.

Common businesses that utilize this funding option are restaurants, auto service centers, dry cleaners, online e-commerce stores, and other retail stores. Seasonal businesses also use this type of financing commonly because they have fluctuating sales. This means that there are periods of heavy sales and other seasons of poor sales, so the merchant cash advance is perfect for them to pay back without concern of how to pay another big monthly bill.

The Benefits of a Merchant Cash Advance

  • Credit is reviewed, but Substandard, Mid-Prime to Subprime Credit are all considered.
  • Approval can be given even if you have a low monthly or annual revenue.
  • Even if you have challenged or no financial statements available such as Tax Returns, Balance Sheets, or Profit & Loss, your loan application will be considered.
  • Concerns about daily balances and/or Overdrafts or NSF’s, can still be approved.
  • Even if you have less than 3 years in business, your merchant cash advance can be processed.
  • If you have the need for speed, this is the financing for you. When you need money faster than the traditional process allows, the merchant cash advance gives you quick access.

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Do Merchant Cash Advances Hurt Credit Score?

Typically, a merchant cash advance will have zero impact on your credit score. Because it’s an advance that uses future revenue from debit and credit card processing the minimum credit score requirements are far lower. That being said, some lenders will run a credit check and take a look at your business credit score during the application process. If your lender’s credit inquiry ends up requiring a hard credit check, it could hurt your credit score.

What Is Needed to Apply for a Merchant Cash Advance?

There are only a few documents you may need to apply and be qualified for a merchant cash advance. These include but are not limited to*:

  • 1 Page Application
  • Business Bank Statements
  • Merchant Processing Statements (if applicable)

*Requirements can vary. Some require only bank statements, but others will require more.

Check out How to find the Best Small Business Loans to weigh all the benefits and evaluate the decision to get funding for your business

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.