5 Things You Should Know Before Obtaining a Merchant Cash Advance

Merchant cash advance is the ideal source of funding for small business owners. The cash advance is mainly directed at small retail stores, restaurants, and other similar small businesses. It is the perfect solution for small businesses that need quick access to funds.

Are you a small business owner thinking about obtaining a merchant cash advance? If so, you will find the following 5 things helpful in making an informed decision about merchant cash advance.

1. No Upfront Fees and Charges

The best thing about merchant cash advance is that there are no upfront fees and costs. Unlike traditional loan options, you don’t have to pay any application fee or closing cost to obtain merchant cash advance.

2. Obtain Funds with Low Credit Score

Another thing you should know about merchant cash advance is that it does not require a high credit score to become eligible for the fund. You can obtain the fund even if you have a low credit score. The application for merchant cash advance depends on two factors alone:

·         the monthly credit sales and

·         the number of years the business has been in operation

A low credit score is of little value for obtaining the merchant cash advance. Your current repayment ability is more important as compared to your past credit history.

3. Quick Loan Approval Process

Another hallmark of merchant cash advance is that you can obtain the loan in as little as 48 hours. This is quite unlike traditional loans whose application process itself takes weeks and sometimes months to process.

In applying for a traditional bank loan, you have to fulfill various forms and submit a number of different financial documents. That’s not the case with merchant cash advance. You don’t need to submit tax returns, financial statements, and other similar documents to obtain the loan.  

4. Protection of Personal Credit and Assets

Unlike traditional loans, the personal credit and assets of the owner is not put at stake. The reason is that merchant cash advance is not a loan in a conventional sense. The cash advance is treated as a purchase of future sales of the company. You have to return the cash advance upon receipt of sales revenue in the future.

5. Flexibility in Repaying the Amount

One of the biggest benefits of merchant cash advance for small business owners is the flexibility in repayment of the loan amount. There is no strict repayment schedule for merchant cash advance. You don’t have to pay a fixed monthly amount or incur late payment fees on missed payment. Instead, you have to pay a fixed percentage from your future credit sales.

Bottom-line, merchant cash advance is one of the most convenient financing options to fund the operations of the company. The application process is quick, efficient, and involves no upfront fees or charges. You can obtain the funds even with low credit score and pay the amount at convenience upon increase in your sales revenue.

In case you have anything more to ask regarding merchant cash advance, you are free to drop us a comment below or contact us here.