As an entrepreneur running a startup, or an owner of a medium-size business, your cash flow may not be consistent. In this situation, you may want to consider turning to a lender who offers merchant cash advances.
What Is a Merchant Cash Advance (MCA)?
A merchant cash advance (also known as an MCA) is a loan alternative, which can offer businesses without collateral or credit history access to needed funds. The lender providing the MCA is essentially making a discounted purchase of some of your business’ upcoming credit card sales. After advancing you the funds, the lender takes a portion of the monthly credit card sales as repayment of your contract.
Advantages of the Merchant Cash Advance for Business Success
- No collateral required: You don’t need to risk valuable assets to qualify for an MCA.
- No credit history needed: You don’t need a business credit score to qualify, and the merchant cash advance contract won’t affect your credit score and history as you are building it.
- Quick and simple funding: A traditional lender may consider details like your business plan, financial statements, and tax returns if you’re seeking a standard business loan. MCA providers, however, needless data. Merchant cash advance providers typically consider your monthly credit card sales and length of time in business. Decisions are quick, and you could receive funds in a week or less, whereas a commercial loan from a bank could take months.
- Revenue-based repayment: Slow sales could mean problems when you’re trying to pay off a traditional commercial loan. That’s because standard bank loans require a fixed monthly payment, no matter how little (or how much) you’ve earned that month. With a merchant cash advance, the advance is repaid (plus fees) as payments come into your company. MCA payments could be deducted daily or weekly, via automated cleaning house (ACH) withdrawals. Payments are typically an agreed-upon percentage of your credit card sales, deducted until the contract is paid off. Higher credit card earnings help you pay off the advance sooner.
When a conventional, commercial business loan won’t do, a merchant cash advance provides an option to help grow your business. Contact Simplicity Capital Finance about business funding options, including a merchant cash advance, today.
