Looking to Obtain a Merchant Cash Advance? Here’s What You Need to Know

For small businesses, obtaining financing can feel almost impossible. Banks are notorious for their stringent lending criteria. They require near-perfect credit, a minimum of two years in business, and specific revenue minimums. Even if you meet those requirements, there’s still a chance you get denied. A merchant cash advance may provide a valuable alternative. Here’s what you need to know.

What Is a Merchant Cash Advance?

A merchant cash advance (MCA) is a type of financing that provides you with an advance on your future card sales. So, it’s not technically a loan. The MCA company then automatically takes a set percentage (or fixed amount) of your daily or weekly card sales until you repay the advance plus applicable fees.

How Do You Get a Merchant Cash Advance?

The process of obtaining a merchant cash advance is substantially easier than getting a bank loan. Most MCA providers have a one-page application that you can complete online. After you submit your application, the MCA company may request additional documentation to verify your information, such as credit card statements or bank statements. Provide the information promptly to avoid delays. In most cases, you’ll get an approval decision in a few days and have the money a day or so after that.

What Are the Benefits of a Merchant Cash Advance?

A merchant cash advance offers a viable alternative to those who can’t qualify for a traditional bank loan. It can also be beneficial for those who need money quickly and can’t wait for bank approval. It’s faster, you don’t require perfect credit to qualify, and you can use the funds for just about anything you need to run and grow your business.

What Can You Use a Merchant Cash Advance For?

You can use an MCA for almost any business-related purpose, whether it’s to manage your day-to-day operations or help achieve your growth goals. Some common uses include:

  • Debt consolidation
  • Paying employees
  • Paying utilities, rent, or insurance
  • Hiring and training new employees
  • Remodeling
  • Purchasing more inventory
  • Getting new equipment
  • Marketing
  • Opening a new or second location

Using a Merchant Cash Advance Instead of a Conventional Loan

Even if you qualify for a conventional business loan through a bank, it can take a while to get approved and receive your funds. That means you might miss out on some incredible growth opportunities. A merchant cash advance can give you the money you need when you need it, allowing you to run your business successfully.