For those not so familiar with merchant cash advances, its system allows businesses that are paid through credit cards and have a merchant account for receiving cash advances based on the projected future credit card payments.
This means that if you have a business that receives credit card payments, you are eligible for cash advances from a merchant cash advance provider or ISO.
Merchant cash advance offers the following compared to other sources of cash advances;
The time for approving cash advances from merchant cash advance providers ranges between just one to two hours or two days maximum, depending on the complications involved.
Most established MCA leads vendors often take a few hours as their application process is simple.
You apply for the advance by filling out a one or two pages document accompanied by your identification details like your social security number, business tax registration number, business registration certificate, and any other document as may be required by an MCA loan provider.
You will also attach a copy of your credit card statement, including a copy of your bank statement for up to six months.
Once you send the application, you will get a response within a few hours of your application.
The approval rate by MCA providers is more as they don’t consult with any credit reference companies.
They also don’t prefer going outside the information provider.
Once they see there is consistent credit card payment and that the payments are processed to your bank account and the money you want can be covered by the credit card sales, then they are ready to give you money.
This is so much different from traditional banking where they seek to find your credit history, creditworthiness rating, and so on.
There are times in business when an opportunity may present itself and you need to be ready to take the leap.
For example, when a festive season is looming and you are highly likely to spend a lot on shopping, you may need some urgent cash ready for paying your employees salaries so they continue their work during your absence.
This may prompt you to look for some advanced capital.
When you compare merchant cash advance providers with banks or other banking institutions like, microfinance organizations, merchant cash advance providers are the fastest.
Most financial institutions will keep you waiting for days, however, the merchant cash advance process is comparatively faster.
Merchant cash advance providers only require that they hold back a percentage of daily credit card payments off your credit card sales.
If you borrow $20,000 from a merchant cash advance provider, then you must have agreed on the payback of $26000 and a holdback of 20%.
It means the daily credit payments you receive, 20% will be retained to pay the $26,000 until it’s paid up fully.
The rest will be paid to you, so you can go on with your usual business transactions normally as before.
Merchant cash advance ensures peace of mind to merchants as the repayment is based on a percentage of the daily sales, and the ISO is able to monitor your daily sales.
The higher the daily credit card payment, the faster the advanced cash can be repaid.
You don’t interact with the portion of the daily cash that goes to repay the amount.
Merchant cash advance moves your payment to a new credit card processor.
Then they deduct the percentage of holdback daily quite effortlessly; as a result, every business owner can go about without mental pressure at work due to limited business working capital.
As an MCA leads vendor, we make sure each of our businesses is operating for ten years with at least $5000 worth of sales every week!
When you get money from a merchant cash advance broker, you will not be subjected to restrictions of any severe kind.
The only restriction is to change your credit card processor to the cash provider and facilitate deducting the holdback percentage.
Traditional banking will require that you deposit all the money into the account that you have with them, plus follow some more restrictions.
But with the business cash advance option, there is much freedom with attaining business loans, only if you can afford a higher rate of interest.
MCA providers don’t look at whether you are listed with any credit reference bureau or your creditworthiness score.
This means that even institutions whose credit rating is not good can access funds from MCA brokers; however, there are repercussions involved if the contract isn’t treated with respect by both parties.
This is such a breakthrough because once an institution’s credit rating has gone down; it takes a lot of effort, PR, and time to improve its financial rating to reach an acceptable level for any bank to sanction a loan.
Clearly, there are more benefits that your business will get from getting cash advances from an MCA provider than you would from other financial institutions. The only challenge is whether you have enough transactions daily that can qualify you for such funds.
Are you having a business that will need some cash advances or you are an MCA provider who is looking for MCA leads?