What is a Merchant Cash Advance?

If you're a small business in need of quick cash, chances are you've heard about Merchant Cash Advances (MCA), but what is it exactly? Is it difficult to obtain? Do you have to have impeccable credit? What do you have to put up for collateral?

Unlike traditional bank loans where the credit rating and collateral required have tremendous impact on successful approval, Merchant Cash Advances (MCA) has less stringent requirements and have a much higher acceptance rate. 

MCAs are fast and convenient to obtain, especially when a business requires cash fast (in many of our client’s cases 2-3 business days is all it takes for their funds to be deposited).

Repayment

What’s particularly unique about MCAs is the repayment process is very simple and straight forward; the borrowed funds are automatically paid back through a small percentage of your business’ daily debit and credit sales transactions. A merchant cash advance payback is revenue-based. Meaning, when you have a busy month you will payback more, and when you have a slower month the payback amount will be less. This percentage-based collection policy allows a business to grow instead of draining its funds. You also do not give back a set amount every day, it is a percentage of your sales. Let’s say the cost of borrowing is 20%. Meaning, if you make $100 one day and $2000 the next, then you will only pay $20 and $200 respectively.

Credit score and Collateral 

Unlike bank loans, there is no collateral required and while the credit score does matter for an MCA, it does not have to be perfect. If you choose to work with us, we have private lenders available who will accept credit scores as low as 450. 

Want to see how much your small business can qualify for? Fill out this quick application form and we'll search our database of lenders for you.