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What is a Merchant Cash Advance?

As the manager or owner of a small business, you are probably very much aware of what a traditional small business loan is. While small business loans can often save the day when your business finds itself short on cash, the application process can be difficult, confusing, lengthy, and full of hassles. Believe it or not, small business loans are not the only solution for securing additional cash for your company. So what is a merchant cash advance, exactly?

First and foremost, it is important to understand that a merchant cash advance is not a business loan. In fact, it's not a loan at all. A merchant cash advance is what is known as credit and receivables funding which means it is the purchase of your future credit card receivables at a discounted rate. Repayment is based on the factoring of a fixed percentage of your daily credit card processing. The advance maturity period is usually up to 6 months. So, if you bring in less sales one day, you pay back less for that day.


Who Can Use Merchant Cash Advances

If you need operating capital but don't qualify for a traditional business loan because of poor or little credit, a merchant cash advance is a viable alternative for your company. You will receive a lump sum payment, which is the advance, in exchange for a share of your future credit card sales. Restaurants, retail, and service companies with strong credit card sales are the most frequent users of this type of loan alternative. Almost any business with sufficient credit card sales for the last 3 months can qualify.

Merchant Cash Advances Mean Easy Funding in Tough Times

In today's tight credit market, a merchant cash advance is a very easy and efficient way to get funding for your business when you need it most. A merchant cash advance is a smart, safe, and simple solution to your business' immediate cash flow needs. Most business advances are funded within 3 to 10 business days with no application fees and very little paperwork required. This makes obtaining a merchant advance much easier and more convenient than the typical business loan.

Small business owners can apply for a merchant cash advance online, in the privacy of their own office, aswell as over the phone and via fax. With online security and discretion practiced by Business Loan Option staff, there is absolutely no risk of such a sensitive matter to be released to your company's staff. The application process is always fast, easy, and direct.

How the Merchant Cash Advance Works

If you find that your business is in financial crisis or simply needs a little extra capital to keep things on track, a merchant advance may be the perfect solution. Once you receive the advance funds, via bank wire or direct deposit to your business account, the repayment structure couldn't be more user-friendly. With no regular fixed payments and affordable factor rates, a percentage of your daily credit card receivables will be used to satisfy your financial obligation. This simple and easy structure allows for merchants to pay more when revenue is strong and a little less during slower times.

The flexibility of a merchant cash advance allows small business owners the freedom to operate normally in harsh financial conditions.

Funding Tailor-Made for Your Small Business

Because there are no restrictions on how you spend the funds you receive from Business Loan Option, the possibilities are limitless. A merchant cash advance can be used for just about anything your business needs from meeting payroll obligations to marketing to investing in new office furniture. The key to getting the most out of a merchant cash advance is to make sure you borrow wisely and to understand what the costs are.

If you would like to learn more about the business advance services that we offer at Business Loan Option or more about merchant cash advances in general, feel free stop by our FAQ page. If you'd like to get an idea of what you could qualify for today, check out our Business Advance Calculator.

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This whole experience was easy and awesome. Professional, easy, and pleasant.
- Jane
HR Dept.
My partner and I were skeptical at first, but really needed some extra funds to buy supplies for our next project while we waited on the retention to be paid from the last job, so we decided to take a chance. Glad we did. We got the funds, got our supplies, and a long-term contract.
- M and D