Merchant Cash Advance

LEARN MORE IN OUR BIZFLY MERCHANT CASH ADVANCE GUIDE BELOW

Merchant cash advances allow business owners to leverage receivables for immediate cash to take care of business needs.

Business Funding With Merchant Cash Advances Guide

What is a Merchant Cash Advance?

A merchant cash advance is a loan product that can be very beneficial for businesses that need cash fast, but don’t want to take on the kind of debt load that a traditional loan entails. In effect, the lender provides the borrower with a cash payment, in exchange for a portion of future credit card receivables on sales.

The benefit to the merchant is that they get cash right away to cover expenses. They effectively are selling a portion of future credit card receivables to the lender, at a discount, which is analogous to the interest rate in a traditional loan.

There are many benefits and advantages to this kind of business funding over traditional loans, as highlighted in more detail below.

How Does a Merchant Cash Advance Work?

The merchant cash advance is fairly simple and seamless, which is one of the reasons it is a preferred form of business funding for many businesses. There is very little manual work that needs to be done, as the repayment percentage of credit cards sales can be programmed and handled automatically and electronically.

The borrower takes out a cash advance for a certain amount of money. And based on the approved rates, they agree to the obligation of a certain rate of repayment on credit card sales. This ultimately covers the principal and interest on the merchant cash advance.

Repayment isn’t tied to a calendar date, but rather dynamic based on sales, so it can vary depending upon the business cycle, and doesn’t typically come with a fixed repayment term like a regular loan. This helps business owners with their merchant financing, as they don’t owe large fixed payments when business may be slow.

Is a Merchant Cash Advance Right for My Business?

Whether or not a merchant cash advance is right for your business is obviously a financial decision that you will have to make for yourself. However, they do present many advantages that make them appealing to sales-based businesses.

These include:

  • Little effort to monitor and repay, since repayment funds are deducted automatically from credit card sales
  • Cash is available as a lump sum right away for the borrower, to pay for expenses, whether planned or emergent
  • No monthly or lump sum repayments, with amount due to lender tied to sales, so no burdensome repayment amounts when business is slow or in a downturn
  • Generally, a lower qualification threshold than other forms of business funding or merchant finance, since future sales guarantee repayment

How Do I Qualify for a Merchant Cash Advance?

BizFly Funding offers a wide range of merchant cash advance options, with amounts, estimated term, interest rate (called the factor rate), and other details all flexible and customizable to suit your individual business needs.

There are a few basic requirements to qualify for the MCA loan, however, and they include:

  • Estimated Business Loan Term: 2 – 12 Months
  • Must have been in business for at least 2 months
  • Must have a 500+ minimum credit score
  • Must have $8,000 minimum monthly revenue
  • Rates: 24% – 49%*
  • Min Business Loan Amount: $8,000
  • Max Business Loan Amount: $250,000
  • Max Number of Negative Days: 4 Within a Month
  • Rates depend on duration of funding

There may be additional requirements in some cases, as every business and lending situation is unique. The amounts available to borrow will depend on your revenue, needs, and other factors, and are evaluated as part of the qualification and approval process.

What if I Already Have an MCA Loan/Merchant Cash Advance for My Business Funding?

Some of our best customers actually come to us from other business funding providers. Even with an outstanding merchant cash advance, BizFly Funding can help.

If you are paying too high a rate, need additional up-front funds, are sick of additional or hidden fees and charges, or are unhappy with the service level of another lender, then check out BizFly.

We can buy out your existing MCA loan, and get you started with one of our superior merchant cash advance options. This can save you a lot in terms of lower factor rate, few if any fees, and lower or non-existent additional costs.

How Do Merchant Loans Work With Bad Credit?

Because merchant loans or merchant cash advances are based on future credit card sales, the main considerations have to do with the health of the business – how long it has been established, average monthly revenue, and so on.

Credit scores and credit history are often only a very minor consideration – so long as you meet the minimum, which is quite low, you can qualify for a merchant cash advance.

Bad credit or limited credit history are not impediments to qualifying for this valuable and useful form of business funding.

What Are the Main Uses of MCA Loans in Merchant Finance?

There are many uses for merchant cash advances, and you can determine how to best utilize the funds for your business needs.

Some of the most common uses that we’ve experienced with our clients include:

  • Immediate funding for limited-time opportunities, purchases, and so on
  • Covering labor costs and expenses when sales are in a downturn
  • Paying for unexpected or emergency expenses, bills, etc.
  • Managing inflating rent/lease/real estate expenses
  • Buying additional inventory units or production runs to fill growing demand

How Do I Apply for a Merchant Cash Advance With Bizfly Funding?

With BizFly Funding, you can apply for a merchant cash advance online, through our website, in a very simple, quick, and easy process. Pre-approval can be received in as little as 30 minutes, and it will not affect your credit score.

Step 1: Apply
  • Fill out our One Page Application.
  • Submit the last 3 months of your Business Bank Statements.
  • It is free and will not affect your credit score.
  • You must be in business for a minimum of 6 months - No-Startups.
Step 2: Get Approved

As soon as this is submitted completely, it will be submitted to our underwriters and our Funding Specialist will contact you with a few offers to choose from. 

Get an approval within hours after your application is processed.

Step 3: Get Funded
  • Choose one of the offers provided by the Funding Specialist and provide a few extra documents to complete your submissions.
  • Once the underwriters have received the full submissions package – the funds will hit your business bank account within 1-2 business days.
  • In some cases, same day funding can be applied.

Merchant Cash Advance Recap

Merchant cash advances are an incredibly valuable merchant finance tool for business owners. They are superior options to traditional business loans in many respects.

  • They offer flexible, dynamic repayment based on sales, not a fixed schedule
  • A wide range of loan amounts, estimated terms, and factor rates are available
  • Bad credit or limited credit history is not a disqualifier
  • Merchant loans can be used to pay for any expenses your business may incur
  • They provide cash immediately to pay for your short or long-term needs
  • They are easy to apply for and qualify for, with funding often available within 24 hours

If you have additional questions about merchant cash advances from BizFly Funding, need more information, or help with your loan application, our support team is more than happy to assist you!

Simple Online Application Process

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Merchant Cash Advance FAQ’s

This type of business funding has low document requirements so you can receive funding possibly in the same day you apply.

This type of alternative funding option very flexible credit history requirements so it will have very little impact on whether or not you receive funding.

There are no restrictions, you can use the money the loan how you see fit.

It may be possible, it just depends on a few factors. Speak with your representative for more details.

This is also possible, it just depends on a few factors. Speak with your funding representative to see if it makes sense for your business.

This can depend on several details about the offer but it is definitely possible. Speak with your funding representative.

A minimum of two months in business is required.

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