You may have heard about some advertisements regarding merchant cash advances and how it works. But do you really know what it is?
Merchant cash advance (MCA) is another term for credit card factoring. It is used as a reachable tool that gives small and medium-sized businesses the chance to raise their future credit card sales with a discount.
The MCA is actually an advance payment that ranges from $5,000 to $30,000 to a trading merchant. Upon getting the advance money, you will agree to give a percentage of your future daily credit card sales to the MCA provider, which is the process done for repaying the cash advance.
Because of our current market, only few banks approve loans to small business owners. If you have a growing business and is struggling with financial problems, there is very little to no chance that you will get approved of a loan application. This is when business cash advance loan becomes reliable. It is a helping bridge for businesses to get funded even though they are not yet considered to as large establishment.
You may think that because your business is currently not going well, there is no way you can repay the cash advance even after you are approved of it. But here’s a hint: The cash advance lender will only get the agreed percentage from your monthly sales, no matter how high or how low your sales is.
The repayment amount is usually between 12 to 20 percent of your business sales. It does not matter how much the MCA provider is getting from your credit card in a monthly basis, just as long as the agreed percentage is being paid. So the higher amount you can pay the lending company per month, the faster you will complete the repayment process.
Another thing you may be worrying about is supposing the repayment process will take longer than one year. No need to worry. The cash advance lender will not take legal actions against you just because you are not able to pay the cash in a quicker time. It is included in your agreement that they wait until your sales is able to repay the complete amount little by little.
Now that is something you can rely on for your business needs. The MCA is an excellent business loan alternative that is perfect for any type of establishment. It doesn’t matter what type of business you have; it can be a restaurant, retail shop, book shop, medical supplies shop and so on, you are still eligible to get the cash advance.
John Gotidoc writes articles for Entrust Cash Advance, an established alternative business loan provider that helps small to medium-sized businesses secure funding for additional working capital and other business-related funding. Entrust helps businesses grow and entrepreneurs prosper. Call their toll-free number 877-760-9226 or visit their website at if you are interested in securing money for your business.