Merchant Cash Advance | Advance Funding Partners
Get the Help you need now with a merchant cash advance
When you haven’t been in business for very long, or you don’t have a great credit score, it can be hard to qualify for small business loans. Even if you do qualify, the process might take a while.
If you need a small amount of money quickly for temporary cash flow help, sudden and unplanned expenses, or paying off urgent debts, you may want to consider a merchant cash advance.
Merchant Cash Advance Explained
A merchant cash advance (MCA) is often grouped in the same category as other small business loans, but an MCA technically isn’t considered a loan. It’s more like a lender purchasing a percentage of your future sales. Rather than an APR and monthly payments, an MCA uses a factor to calculate fees. It is repaid in automatic, often daily payments as a percentage of credit card sales.
The factor of an MCA is a number between 1 and 2 (typically between 1.09 and 1.5). This number is essentially a multiplier to calculate how much you have to pay back. For example, if you borrow $10,000 with a factor of 1.4, you’ll have to repay $10,000 x 1.4, or $14,000. Repayment will start immediately, with a percentage of all debit and credit card sales, often between 5% and 20%, automatically debited to the lender daily.
Qualifying for an MCA is generally much easier than other loans. Lenders offering MCAs often don’t care much about how long you’ve been in business or your credit score. The biggest factor in qualifying for an MCA and getting a good factor is your credit card sales. The higher your credit card sales, the better your chance of qualifying and getting a good rate. MCAs are often approved on the same day you apply, with funds available within the next 1-2 days.
MCAs are a great option for some businesses because you can get the money you’re borrowing quickly, and you don’t need strong credit to qualify. In addition, there are no restrictions on how you use the money, and no collateral is required.
is a merchant cash advance right for you?
This loan is best for scenarios that require money quickly and will have a high ROI to offset the high fees. This includes:
- Buying extra inventory when it’s at a discount to increase profits later
- Sudden damages that need to be repaired immediately to maintain cash flow
- Paying off urgent debts with higher fees/penalties if they go unpaid
Getting started with an MCA is generally easy and straightforward and can be done online. Before applying, you should be prepared to prove about $4,000 to $5,000 in daily credit card revenue.
If you think an MCA is a choice for you and your business, Advance Funding Partners is here to help. We offer a fast and easy application process to get you the money you need when you need it, giving you more time to focus on what matters: your business.
