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.

Merchant Cash Advance FAQ:
What is a Merchant Cash Advance?

A merchant cash advance provides a lump sum cash infusion to organizations which accept credit or debit cards as a form of payment from their customers.

The amount of a merchant cash advance is based on the portion of average monthly sales that occur as credit or debit card transactions. A merchant cash advance is repaid automatically by the merchant’s card processor as a small percentage of each debit and credit card transaction until the amount has been repaid, usually over a period of 6-18 months.

Some of the reasons our clients commonly cite when applying include:

  • Desire to add new products or services to grow revenues
  • Need working capital for expansion, renovation or remodeling
  • Need to access working capital quickly to cover unexpected expenses
  • Inadequate cash on hand to purchase inventory or equipment
  • To resolve temporary cash flow shortages
  • To fund marketing and advertising campaigns needed to grow

Our merchant cash advance calculator shows the amount of merchant cash advance financing that might be available to an organization that accepts credit and debit cards as a form of customer payment.

Apply

Unlock Working Capital

Discover how much working capital your organization may qualify for:

  • Time in Business
    0 Months 5+ Years
    0 Months
  • Gross Monthly Revenue
    $0 $1,000,000+
    $0
  • Percentage of Gross in Debit/Credit Cards
    0% 100%
    0%

Apply Now

Congratulations! Based on the information you provided your business may qualify for:

  • Merchant Cash Advance $0
  • Business Cash Advance $0
  • Line of Credit $0

Request a Quote

Merchant Cash Advance Calculator

A merchant cash advance calculator indicates the amount of working capital your business may be able to access with a merchant cash advance, business cash advance or a business line of credit.

Merchant Cash Advance Glossary of Terms

Some of the terms commonly used in merchant cash advance financing programs include:

Merchant: Any type of organization that accepts credit and/or debit cards as a form of payment from their customers; such as a restaurant, retail or service business

Cash Advance Rate: The financing fee, usually calculated as a percentage of the total Merchant Cash Advance

Funding: The process of releasing the advance to the Merchant; usually a wire transfer directly to a bank account

Funded Amount: The amount of working capital delivered to the merchant upon funding

Repayment Amount: The amount of the advance plus the financing fee that must be repaid

Merchant Cash Advance FAQ: How Does the Process Work?

1. A merchant that accepts credit or debit cards as a form of customer payment applies for DB Squared merchant cash advance financing.  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. We source multiple options so we are often able to provide merchants with multiple merchant cash advance proposals, so they can choose the one they think is best for their business.

3. Once approved and funded, repayment occurs automatically through the merchant’s card processing company as a small percentage of each credit and debit card transaction until the amount has been repaid. Merchant cash advances are usually paid back far more quickly than business loans, usually over 6-18 months. Flexible repayment terms may also be available.

Apply

Request a Free, No-Obligation Merchant Cash Advance Proposal

Get the working capital you need to grow your business!

The Merchant Cash Advance Process in 3 Easy Steps

  1. Apply
  2. Review Offers
  3. Get Working Capital

1. Apply

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.