A merchant cash advance is a type of financing that is based on future credit card sales. It’s a type of loan not based on your credit score, but it does have some requirements. When you apply for a merchant cash advance, here’s what you should know.

Minimum Monthly Transactions

To get a merchant cash advance, you’ll probably need to show a steady stream of monthly transactions. Every lender will have different amounts, but having $2,500 to $5,000 a month over the past year in credit card sales is generally required.

Don’t Work With More Than One Lender

You can have more than one bank loan or credit card, but you can’t have more than one merchant cash advance in place. You must pay back one advance before requesting another.

Your Business Can’t Have Liens

A merchant cash advance is a lower-risk financing option, but lenders are still pretty wary when the business has a lien on its property. This is a red flag that your business has some financial issues. You probably won’t qualify for a merchant cash advance.

You Have to Validate Your Documentation

Although your lender may not care about your credit score when you’re asking for a merchant cash advance, you will still have to provide documents that show your past sales. You have to show that you have enough sales to support paying back the loan.

Lenders May Ask Questions

Your merchant cash advance lender may want to know what you need the money for. Your lender may need to know why your business is experiencing a financial issue. However, once you do qualify for a merchant cash advance, you should receive the money in just a few days or even hours. MCAs are a little more expensive than traditional loans, but when you need immediate working capital, it can prevent more problems.

Contact Simplicity Capital Finance for more information about a merchant cash advance for your business.