An innovative alternative to the bank loans tends to have easy eligibility standards so most small businesses shouldn’t have a problem qualifying. If you have little or no collateral, limited business history, or a low credit rating then Merchant Cash Advance Loan could be a solution to your financing problems.
A merchant cash advance (MCA) was originally structured as a lump sum payment to a business in exchange for an agreed-upon percentage of future credit card and/or debit card sales.ikipedia
A merchant cash advance is not technically a loan. With an MCA loans, a financing company advances you cash in exchange for a percentage of your daily credit card and debit card sales, plus a fee.Fundera, Inc
A merchant cash advance (MCA) isn’t really a loan, but rather a cash advance based upon the credit card sales deposited in a business’ merchant account. A business owner can apply for an MCA and have funds deposited into a business checking account fairly quicklyOn Deck, Inc
A merchant cash advance is an option to get cash immediately for your business, in exchange for funds deducted directly from your bank account or credit/debit card payments in the future. For businesses that make a big portion of their revenue through credit card payments like a restaurant or a retail store then you can use a cash advance loan like a short-term financing tool.
Cash Advance Loans Rates
Cash advance loan providers align their fees with a factor rate rather of an interest rate. Factor rate ranging from 1.20 to 1.25. A factor rate is what you multiply your loan amount by to figure out the total you’ll owe. Cash advances loan can get a little expensive for a few different reasons. The most important reason is that cash advances loan tend to work for riskier borrowers those with lower credit scores or those with newer businesses. And riskier lending options correlate with higher rates and fees.
Example of Cash Advance Loan
Let’s say you’re advanced $20K with a factor rate of 1.18.
$20K multiplied by 1.18 is $23,600, which is what you’ll need to repay with your daily repayments by daily credit/debit card or bank transactions.
At first glimpse, that might seem like you’re just paying an 18% interest rate—but looks can be misleading.
You have to understand the true cost of the merchant cash advance by its APR.
If your lender will be taking 15% of your daily credit card sales and you’re estimating $25K a month in credit card transactions, you’d repay that advance in 189 days with daily payments of $125.
$25,000 / 30 days = $833 Your Daily Income
$833 * 15% APR = $125 Daily deduction on your income
$125 * 189 days = 189 Days
How to Qualify for Cash Advance Loan
Our application process is easy, free and won’t affect your FICO ® score. Apply now, and get an instant decision on your loan. To qualify, you should be in business for at least one year and have a minimum of $50,000 in annual revenue or $4,200 per month over the last three months.
Merchant cash advances are paid back with your daily credit/debit card sales, so we will look at your credit card processing statements to make sure you have enough volume coming into the business.
- Bank Statements
- Driver’s License
- Voided Business Check
Payback options for Cash Advance Loan
During the length of your payback period, a small percentage of your daily credit/debit card sales is withheld until the advance is paid in full.You’ll actually repay a smaller amount of money during slower weeks and months—unlike with a term loan, where you’ll either make your payments on time or suffer the late fees.
Who can apply for Cash Advance loans
A cash advance loan could be a reasonable option for someone who has an emergency need for money and limited resources for getting it, most importantly when that person has a clear and reasonable plan for paying back the money in a short period. It is, for example, a better option than a bank line of credit, due to the exorbitant triple-digit interest rates those loans typically carry and the greater payoff flexibility that comes with credit card debt.
- Includes various types of businesses from car washes to towing services, bus and limousine fleets to gas stations, taxi and transportation services to couriers and mobile oil change companies, the transportation industry is one that has no pun intended. Within these parts are ample opportunities for business owners to succeed.
Retail Business Loan
- Retailers get financing to grow their business or to purchase inventory and ramp up for busy times of the year. Retail business loans come in various forms, such as a short-term business loan used to purchase needed inventory to prepare for the busy season or SBA retail funding to buy real estate and expand.
Trucking Business Loan
- Shipping & Logistics is a $700 billion dollar industry annually. Commercial trucks and trained drivers are a financially intensive venture. We offer financial resources to buy new vehicles and logistics tools, maintain your fleet, and hire more trained drivers.
Barber Shop Loan
- A barber shop needs a lot more than scissors to make money. A professional look, marketing materials, barbers chairs and more are needed to help grow an efficient business in this industry. With the barber shop industry accounting for $1.8 billion dollars in annual revenue, there is a lot of money to be made out there by the 220,000 barbers that are licensed in the United States.
Healthcare Business Loan
- Equipment requirements and training requirements for medical offices eat up a lot of capital. The maintenance of that equipment is expensive as well. Those bills will keep coming in even when your office is slow. A healthcare business loan from our network of alternative lenders help with cash flow and allow things to run smoothly.
Why choose Merchant Cash Advance 360
The loan fees can sometimes be higher but open to businesses with lower credit and provide a level of ease, convenience, and service that many traditional lenders or bank can’t match.
Merchant Cash Advance 360 is a nationally recognized leader in the financing industry for providing the best business lending solutions available to small and mid-sized businesses. We leverage our network of 4,000 competing commercial lenders to provide your business with the largest selection of commercial financing options.LEARN MORE