Guide To Merchant Cash Advance For Small Businesses

A merchant cash advance (MCA) is for businesses requiring cash immediately to suffice its capital needs on a short-term basis.

To access it, they need to leverage the credit card merchant account.

MCA is an option for small businesses for instant funds without going through a lengthy process of approval or stringent credit necessity.

Know What Merchant Cash Advance Is & Its Difference From Traditional Loans

Technically, a merchant cash advance on credit card sales.

Small businesses can apply for it and get immediate access to advance directly into their accounts.

MCA providers calculate the weighted credit and risk factors differently than bankers. The provider majorly looks into the credit card's daily receipts to decide if the business can pay it back quickly.

The small business has to sell a share of future credit card sales to get the capital instantly. The interest rate is higher on an MCA than any other loan alternative, and depending on the company can be restrictively high.

Before moving forward with an MCA loan, you should thoroughly read the terms offered to make an informed decision, keeping in mind the ROI.

Is Merchant Cash Advance Right for Your Company?

A merchant cash advance is an alternative when business necessities require immediate capital quickly to benefit from an opportunity to buy inventory at a discount.

It can be even for a unique marketing occasion, or a short-term necessity of capital. As the credit requirements are less strict, they can be a perfect fit for companies with huge credit card transactions.

You can look for business financing companies like Greenpoint Capital, providing a faster merchant cash advance process with minimal requirements of documentations.

Taking cash advance may not directly impact you, but if you fail to meet the monthly payment due to a high-interest rate, it affects your credit score.

But there are ways that companies with bad credit scores can get loan approval.

What Is The Process For Merchant Cash Advance?

The approval process might take a few hours or a few days based on paperwork and other details. Businesses can find funds in their account in two days when the loan process is complete.

The process of applying for MCA isn't tricky, like traditional loans. Here is what you need to know:

1. Application Form & Other Details

The application form is just one page long, and you need to submit your social security number, business tax ID, and a few other details.

2. Submit Documentation

You need to submit a minimum of six months of credit card processing, bank statements, citizenship proof, and business location copy. Although it differs from company to company

3. Approved Time

A merchant cash advance can get approval within 24 hours for your company.

4. Set-up Credit Card Processing

It requires the company to switch to a new credit card processor. It is inconvenient but necessary for the approval by the MCA providers.

5. Detail Finalization

The funding details are like when businesses can get approval for $10,000 and pay back $13,000. The merchant account debits 15% each day till the complete $13,000 is paid back.

6. Receiving Fund

An MCA cash is deposited directly to the provided bank accounts, and the repayment through the merchant account begins automatically.