Merchant Cash Advance
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A merchant cash advance (sometimes called a MCA funding) is a way for businesses to get quick access to cash that will pay back through credit card transactions the company performs. If you need commercial funding for your company, a MCA funding might be a winning option
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Pros of Merchant Advance
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Fast Access to Cash
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Flexible Requirements and Repayment
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No Credit Score Required
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No Collateral Required
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How does an MCA work?
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Advance amount - The advance amount is the lump sum you receive when MCA is approved. The funding amount is based on your business’s financial strength.
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Payback amount - The payback amount is the amount that the business owner must repay. It is calculated based on the amount funded plus fees called a factor.
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Holdback - The holdback is an agreed-upon percentage of the daily credit card receipts which are withheld to pay back the MCA.
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Who Are MCAs Mainly Designed For? Who Uses Them?
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MCAs are typically for businesses that need access to quick capital to cover unexpected expenses. Business owners can use the advance for any number of things such as purchasing materials for a large order, hiring new employees, preparing for a high-demand season, or buying new equipment.
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MCAs are for any type of business, regardless of industry and size, who have a consistent flow of credit card transactions. It’s also one of the few options for any business who has less-than-perfect credit. No credit score required. Some firms will look at credit scores while others will only care about your current capacity to repay the advance.
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What is the Application Process for a Merchant Cash Advance? Am I Eligible?
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In particular, you may never be required to submit a personal credit score or submit your credit history. Your credit card payments from customers are the primary factor considered by merchant cash advance providers in determining the amount of cash to advance. That’s why it’s common for business owners with bad credit to qualify for an MCA and why it’s a popular financing option.
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In many cases, you will need to provide 3-4 months of bank statements from your business bank account.
