Merchant Cash Advance Companies

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April 21, 2014:
Nuances of merchant cash advance explained. Merchant cash advance as defined by the Wikipedia.

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Working Capital Loans:

The two most common kinds of working capital loans are MCAs and peer to peer lending, which has become more popular thanks to investments from hedge funds and private capital firms.

Who are the biggest and best merchant cash advance companies?

Compare merchant cash advance providers to get the best deal. Remember, they are competing for a piece of your credit card processing receipts, so you can ask around!

Merchant Cash AdvanceMerchant cash advance companies make it possible for businesses to get quick funding, with no collateral, based on the amount of money they collect through their merchant service accounts. Some merchant cash advance services will offer up to $300,000 per location based on sales. The cash advances are paid back automatically and over time when credit card batches are settled. Basically, a fixed percentage of credit card sales goes to pay for the loan, so in slow months the payback amount would be lower but in busy months it would be higher until the debt is paid.

For merchants who need quick cash, the advantages are numerous. Lump sum payments can be granted in five to ten business days. There are usually no application fees or closing costs, and the application process is simplified. The funding can be used for any business purpose, and many merchants spend the money on upgrades to their stores, new equipment, marketing, or other features that are more likely to get more customers. Merchant cash advances are also renewable, making it possible to continuously fund business improvements. Generally the minimum requirements for merchant cash advance loans are that you accept credit cards as a form of payment, process at least five thousand dollars per month in credit card payments (some businesses do more than this in a single day) and you must have been in business for at least a year. Naturally, each merchant cash advance company will have additional stipulations in order to make sure your company is in good standing and expected to be around for the long haul. For example, you may be required to show that you have a certain amount of time on your business lease and are not in arrears on rent.

Merchant cash advance companies make it possible for you to get ready cash for improvements, space, equipment, and inventory. Better yet, a merchant cash advance program enables you  to make payments as a percentage of the dollars that you process through your credit card terminal, so you are not responsible for a fixed monthly payment. If you successfully use your advanced cash to grow your business, you may find yourself paying off your outstanding balance a lot faster, but in slower seasonal times you won’t have to worry about making a payment when cash flow is light. Companies that offer merchant cash advance have less stringent requirements than banks, but usually require a minimum terminal-based sales volume and proof that you are current on your lease. Payments are taken out on batching of credit card receipts, and no personal collateral is required. Overall, time between application and funding is about 5 to 10 business days..

Notes and Special Information

Special note: Ask lots of questions and check rates from different providers. The dollar amounts involved mean that you should be certain that you are getting the best deal and aren't paying back more than you should.