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The Good, the Bad side of Merchant Cash Advance Financing

A business cash advance is an alternative where cash transactions work just like loans whereby you submit an application, agree to interest rates and cash advance amount and then start repaying it back. The advance that a lender gives you is automatically deducted from your daily credit card sales transactions. For you to qualify, your business must accept credit card sales. On top of that, the majority of lenders will require that merchants have a solid financial history, existing equipment or asset lease or certain credit score to be eligible. Despite all that, the approval rate for a business cash advance is much better than that of a traditional bank whereby more than 90 percent of loan applicants are accepted.

Note that a merchant cash advance loan can be costly, they are associated with arduous repayment terms, and sometimes they tend to push on companies that hardly qualify by dishonest lenders. Again, a business cash advance can be the only funding option accessible to some business. The list below provided a practical guideline on business cash advance lenders that can assist you in selecting between the good, bad or ugly.

The good

The reputation of a company will help determine if they are the best service providers. To determine how a business cash advance lender stacks up, find out if the Better Business Bureau accredits them to offer the services and check if there is any complaint filed. Several business owners file grievances against dishonest lenders with the Federal Trade Commission. In many countries, there are merchant advance associations that offer information concerning industry ethics and practices and allows for grievances against dishonest lenders.

Also, you can also opt to ask for referrals directly from your advance lender or do a quick online search for more details. Note that good service providers will never charge for applying or assure an automatic approval.

The bad

Even though you check for references and the company turns out to be a reputable loan lender, you must also make sure that your personal service agreement favors both parties. Here are some few aspects to consider:

Hidden charges

Penalty fees, monthly minimum amount, and other charges accumulate at a fast rate. Before signing any service agreement, it is crucial to ensure that you understand all the possible charges.

Compatibility of Merchant accounts

Typically, reputable firms have agreements with various merchant account providers, and as a result, you will not have to change your merchant service account to obtain a merchant cash advance.

Repayment plans

In most cases, cash advance lenders will take a portion of daily credit card sales until the advance is fully paid off. If you come across a provider who asks you to pay the cash advance in full amount, it is good not to sign that agreement.


Business cash advance is a suitable source of alternative business funding for companies that require funds for operational expenses. Obtaining a merchant cash advance from a reputable lender is one of the best ways to ensure that you get the funding you need without incurring extra costs and penalties.

Business cash advance as financial support for your company

In the current business world, loans and advances have turned out to be a fundamental aspect of every business. If you operate a small business, it is evident to you that the income you are getting is not sufficient to help you in attaining your goals. In this scenario, acquiring additional funds from other sources could be the best alternative. For you to cater for your daily business activities without much struggle, you must have adequate cash at hand. Note that there is more to business than capital investment and material supply. You need to pay your workers, distributors, and vendors as well. To get out of this desperate financial situation, you have to seek the help of merchant loan providers that will give you the funds quickly.

Make sure you have a predictable credit card sales volume for you to qualify for a merchant cash advance funding. Note that many lenders will offer slightly different loan terms, but in most cases, the stability of your credit card sales volume will determine the terms.

Simplicity in borrowing the funds

If you urgently need funds to sort out your business financial issues, waiting for a bank loan to be approved will be a waste of time. A merchant cash advance funding is the most suitable alternative in this scenario. The moment you apply for the funds and gets approved, your money will be transferred to your business account immediately. The service provider handling your loan application will take minimal time to sanction the funds.

Flexible repayment plan

Once you borrow some money, it is evident that you must return it back. However, the majority of individuals have had bad experiences when paying back their loans in traditional banks.  The strictness of these financial institutions has made their operations difficult and stressful. But when it comes to business cash advance lending, you are allowed to pay back your loan as you earn your profit. This means that if your business is experiencing a slow credit sale in a certain month, you will pay less. Since all the loan sanctions are based on the current credit card sales statement, you are allowed to pay the whole amount any time you feel you are able.

Alignment with your business requirements

Each business has a variety of needs. You can arrange your working capital expenditure using your savings. However, remember that the operational expenses of running a business are imperative. This fact is well understood by the financial institutions and business cash advance firms that give loans to small and established business. If even if you fail to prove that your business can make enough income, they will still give out the loan product. You can apply for a business cash advance loan online, and after that, the company representatives will visit your business premises.  An individual entrepreneur can apply for an adequate merchant cash advance funding since the provider will approve it based on the possibility of repayment and the kind of business.

Tips to choose the right Merchant Cash Advance Lender

It is evident that no business person is immune to hard economic times. Your business might be affected by the financial crises, or perhaps you just need additional financing to grow your business. In this scenario having an influx of cash can be advantageous, and you might look for a merchant cash advance providers. Before seeking for a merchant cash advance loan, it is important that you understand how to get the right merchant cash advance providers to suit your business requirements.

Compare the merchant cash advance lenders

One of the essential aspects to consider once you want to compare merchant cash providers are the charges terms. The majority of merchant cash advance creditors will ask for a fee to finance your business requirements. In most cases, the costs are traditionally repaid once you complete repaying your loan. Prudently ponder all the fees that will be charged and choose a merchant cash advance provider with the minimum total charges.

To determine the amount of loan you are eligible to get, the financial lenders will ask for the information concerning your monthly credit card sales of your business. On top of that, this will help lenders to determine if your business will be able to repay the loan. The majority of creditors will ask you to submit statements of your credit card sales for the last six months. This will give the loan provider in finding out how much your business brings on a monthly basis. Note that this type of a loan is not suitable for seasonal business and if you have to, it is good to choose a lender that will ask for a low monthly credit card minimums or a lender that will agree on a minimum of twelve months of sales from credit cards.

Loan requirements for merchant cash advance lenders

You must understand that the majority of merchant cash advance lenders will need borrowers to be in business for at least 12 months before they are considered eligible for a merchant cash advance loan. However, some merchant loan providers will accept the loan application if you have been in business for two months. For borrowers that have been operating their business for a short duration and that have low credit sales volume, researching lender alternatives will be vital.

Besides, it is also important to ponder how loan your business requires the funds. The application procedure for a merchant cash advance is not lengthy, whereby most creditors can approve your request for cash within a couple of days. The documentation required to process and approve a cash advance will differ from one lender to another. It is always recommended to do an extensive investigation and choose a loan provider that requires less amount of paperwork to speed up the application procedure. Bear in mind that, when submitting your loan application form, it can be advantageous to ensure that you are equipped all the necessary paperwork to assist in accelerating the application procedure.

Lending business funds through a merchant cash advance is a suitable means of providing your business with the financing you need. Choosing a reputable merchant cash advance provider will help you in ensuring that all your business financial needs are met.

Vital information on How to Get a Merchant Cash in Advance

A merchant cash advance is the revolutionary financial aid that is steering several small businesses away from traditional financial institutions and credit unions. A merchant cash advance loan is designed to monitor your daily credit card transactions to aid your loan repayment at a rate that is suitable for your business.

How the merchant cash in advance application works

The goodness of obtaining this kind of business financing is in the easiness and simplicity. You do not have to wait for long for them to respond. This type of business financing is a simple online application whereby you will provide some basic information concerning your business. The entire process will just take a few minutes, and you could have a verdict made on your business financing the same day.

It is evident that almost 98 percent of merchant cash advance applications are approved, and for that reason, the probability of success is very high. Contradictory to what a conventional bank will offer, the odds in a merchant cash advance tend to favor you. Financial institution lenders tend to be more restrained and dismissive when lending to new business while a merchant advance provides loans to startups so that they can become key players in the market.

The size of business that is eligible for a merchant cash in advance

Note that you can apply for a merchant cash advance loan irrespective of your business size or shape. You can either be opening your business, and you don’t have any working experience in your preferred industry or you are just operating a well-recognized business. It is evident that this financing has helped many businesses to be more successful.

Small business enterprise can as well benefit from a merchant cash loan. The acquired funds can be used to help business owners during a slow sales season or can be used in covering stock or inventory shortages. Also, a merchant cash advance comes in handy when a large business needs to make significant purchases that need additional capital. Also, it can be used as an emergency fund during hard times.

For you to qualify for a merchant loan, your business must be in operation for at least six months. Hence, you don’t have to panic if you just established your business since a merchant cash advance loan can help you boost your coffers and get the working capital you need.

How to repay your merchant cash in advance

For you to get this type of business funding, your business must be accepting credit card payments. This is because the merchant cash advance calculations are based on your credit card transactions. The monitoring of credit card transactions helps the loan providers to determine the amount of loan your business can get. This also helps in making your loan repayment flexible.

You can still get a loan with a bad credit

A traditional back will require a personal credit history to ascertain if you are eligible for a loan. Banks must also ask for collateral to make sure their investment is safe. If you are a small business owner and you don’t want to risk your assets, the probability of getting a bank loan is almost zero.

Nevertheless, since a merchant cash advance loan is based on recent credit card payments, regardless of how bad your credit score is, getting a business financing to enhance your working capital is accessible.


Guidelines to choose the best business Merchant Cash Advance Firm

Currently, many merchant loan providers in the market claim to offer the best services. As much as this might sound factual, not all service providers can give you the best help. This is just a business language that is meant to entice business owners to get finances from them.

For you to avoid falling a victim of such fallacies, there are some things you need to do. The article provides some guidelines for selecting the right business merchant cash advance company.

Creating a list

The initial thing you need to do is to prepare a list of all the service providers around your area. You can do your search on recognized websites or inquire from your credit card provider. Inquiring from your credit card processor is a better alternative as they can recommend a service provider linked to them. This will make the entire process simple since you will not have to change your credit card provider once they approve your application.

Comparing their policies and interest rates

Since loan providers tend to put the future of their business in your hands, they are forced to ask for high-interest rates. Besides, business merchant cash advance lenders do not ask for any collateral for them to provide the funds. Therefore, they will receive nothing once you default. However, you need to be careful for you to save regardless of their fees. Try to contrast interest rates and policies provided by various lenders. You can go through their sites to get information concerning the provider, or you can contact their support. Fetch information regarding these things and write them so that you can contrast each firm.

Know their qualifications

Note that business cash advance providers use different criteria when it comes to approving their loans. The majority of them prefer a company that has been in operation for at least one year. Since they understand that you can repay their products, they feel more secure to approve the loan. When selecting a business merchant cash advance provider, you must understand their requirements. If you operate a business that is active all year around, you need to go through and comprehend all the steps for a loan application.

Similarly, if your business is a seasonal one, you are supposed to select a provider that is not picky. Besides, you will be required to persuade the service provider that you can repay them and once you convince them, you can begin the transaction.

Read various reviews made by different users

This is a crucial part of this process since the reviews will give you a clear picture of the firm. Besides, you will learn various customer experiences when they worked with a particular company. Nevertheless, you need to be more careful when reading these reviews. You will come across write-ups that are specifically meant for marketing purposes and this reason; you must check the source of information. Ensure that the information originates from a reliable site to get an authentic and fair review.

Selecting a reputable business financing provider is vital since it is the only means to have the best services. Therefore, you must follow this guideline listed above if you don’t want to work with a wrong provider.

Merchant Cash Advance Provides Key Financing

It is evident that there is a high demand for merchant cash advance irrespective of financial institution participation. In the recent years, financial institutions have tightened the underwriting standards for loans, with traditional business lending alternatives virtually collapsing in the rise of the financial crisis.

Merchant cash advance is a suitable option for many business owners because they provide required capital that might not be provided by traditional lending institutions. Cash advance is never affected by lending regulations because they are referred to as factoring products.  This means that a business sells a percentage of its future credit card sales in exchange for a cash advance. A portion of the merchant’s daily credit sales is deducted to pay back the debt.

How a merchant cash advance works

Usually, the person seeking a merchant cash advance will get a lump-sum payment of four times their average sales volume of their credit cards. The lender and the merchant will then agree on how the cash advance will be repaid.

For you to get approved by merchant cash advance lenders, your business must have a minimum monthly credit card sales volume of 5000 US dollars. As a merchant, you must also have a god relationship with your landlord and no unresolved insolvencies.  The documentations required to get a merchant cash advance are minimal, and they include processing statement, bank statements and a copy of property leasing report.

Depending on your potential cash advance provider, the loan repayment will be made in various ways. You can either repay through split funding, direct credit or escrow accounts. Note that split funding provides simplicity and convenience, while escrow accounts and direct debit are relatively cumbersome to manage and offers minimal control to the business owner. Below is a guide on how the three methods work.

Split funding

In this method, the business owner allows its processors to forward the fixed amount of the borrower’s daily payments to the account of the lender and deduct the balance to the merchant’s account. Split financing is the most ideal for the majority of merchants since it is time-consuming and less risky. It provides the most convenient alternatives for merchants due to its simplicity to control its repayment plan.

Escrow account

Daily payments are deposited by the processor, and the lender deducts the agreed percentage from the escrow account. After that, the remaining amount is transferred to the merchant account. This process will result in a delay in receipt of the finances. On top of that, the merchant has minimal control over its finances. This is because the third party has free access to all finances to the debit the amount before they are given to the borrower.

Direct debit

The merchant cash lender deducts the agreed percentage of the daily payments directly. The amount is debited from the merchant’s bank account. This implies that there is less control to the merchant and once the deductions are frequently made, it will cause the dealer to overdraft.