Merchant cash advances can be incredibly helpful for anyone who needs to raise capital for their small business fast. A merchant cash advance or MCA can be a great way to get the money you need when you need it so you don’t have to wait a long time. Sometimes business owners just need to get funds and cannot afford to wait. When you take the time to learn more about this type of loan, you will be able to decide whether or not it is right for you.
How it Works
A merchant cash advance isn’t a standard loan but rather an advance payment against your business’s future income. The lender will give you a lump sum, which needs is repaid automatically using a percentage of your daily credit card receipts. The “holdback” is the percentage that you pay. This will be anywhere between 5 to 20 percent, depending on the size of the advance that is given as well as your business’s credit card sales. The term may be as short as 90 days or as long as 18 months.
The total amount that you can borrow will be determined by your average credit card sales. Merchant advance providers will look over your receipts from the past three to six months to calculate how large of an advance you are eligible for. This sort of advance usually ranged from 50 to 250 percent of your business’s credit card transactions.
Benefits of taking out a Merchant Cash Advance
Quick and easy Application process
You will find that the application process for getting a merchant cash advance is quite simple and straightforward, so you will have nothing to worry about there. You can fill out an application online and upload any required documentation, such as your business tax returns or bank account statements. It is important that you have these things ready so you can get through this process as quickly as possible.
Get the funds you need fast
Another great thing about merchant cash advance loans is that you will be able to get the money you need very quickly and without any issues whatsoever. These lenders can make a decision on an application within a matter of hours, so you will have the money you need in just days. This means that you will get your money faster than you normally would through most other types of loans.
You don’t need to have perfect credit
You certainly don’t need to have perfect credit to qualify for a merchant cash advance, but not everyone will get approved. You might not get approved for this type of cash advance if your credit is absolutely horrible, but there is still a chance if it’s not perfect. The provider will run a credit check on you before determining whether or not to approve your application.
No collateral required
There is absolutely no collateral required to get a merchant cash advance, so you will need to keep that in mind as well. This means that you won’t have to risk losing your home in the event that you are not able to pay back the loan in full and on time. A lot of business owners are hesitant to get a merchant cash advance because they think they need to put up some sort of collateral to qualify, but this is not the case at all. You will find that merchant cash advances are completely unsecured, meaning that you won’t need to put any personal or business assets on the line to get the funds you need.
There are lots of different reasons that you should at least look into getting a merchant cash advance, especially if your business is currently struggling. Sometimes small businesses need help with staying afloat, and this type of loan could do wonders for helping you. The more time you take to look into these loans, the better your chances will be of making the right decision. While it’s true that there are a lot of advantages to getting this sort of cash advance, it is not for everyone. You will be glad that you took the time to do your homework.