Merchant Cash Advance FAQ
Let’s explore some of the most frequently asked questions about using merchant cash advances as cash flow and working capital financing solutions.
The Merchant Cash Advance Process in 3 Easy Steps
- Review Offers
- Get Working Capital
Quick 1-page application. There are no fees to apply, and no obligation to accept. Approval can be made in as little as 24 hours, and account funding can occur as quickly as 3-5 business days.
2. Review Offers
We source multiple options so we are often able to provide merchants with multiple merchant cash advance proposals; you choose the one that is best for your business.
3. Get Working Capital
Easy to manage – repaid automatically by the merchant’s card processing company as a small percentage of each credit and debit card transaction over 6-18 months. Flexible repayment terms may also be available.
Merchant Cash Advance FAQ:
Though both can be used to gain access to working capital, merchant cash advances are not business loans.
How does this type of financing compare to small business loans?
Business loans are based on an organization’s estimated credit worthiness, collateral, and ability to repay. Because merchant cash advances are based on an organization’s average monthly credit and debit card sales, and repaid from future sales, credit worthiness is not the most important consideration in determining approvals.
An organization that has an imperfect credit history or low credit score is unlikely to receive approval for a traditional business loan, but may quickly obtain a large merchant cash advance and get working capital to grow their business or address cash flow challenges. Plus, while banks often require the pledging of collateral before approving business loans, merchant cash advances are unsecured, and approvals may not even require UCC filing.
Finally, business loans often take weeks (or even longer) to go from initial application, through the underwriting process, and to a final determination for approval or denial. By contrast, merchant cash advance approvals and offers might take as little as 24 hours, with funding in 3-5 business days of approval and offer acceptance. Merchant cash advances might be preferable to business loans when fast access to working capital is desired.