Pros
- No collateral is required
- An option for borrowers with low or poor credit
- Quick and easy to apply for
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Cons
- No benefit if repaid early
- Payments are frequent
- Payments could be high if your sales are high
A Merchant Cash Advance could be the solution you've been looking for.
Merchant Cash Advances are designed to get you and your business quick access to funds. This is done by borrowing against the money you will make, and is then repaid with a portion of your sales on a daily or weekly basis.
This option is beneficial for businesses that may not yet qualify for other types of business funding. Certain factors like time in business, which historically make funding difficult to achieve for new businesses, don't apply to the Merchant Cash Advance. As long as your new business has strong sales, this is an excellent solution to get fast capital to help your business grow.
How do I repay my cash advance? The Merchant Cash Advance is repaid through a portion of your daily or weekly sales. Details depend on the way your cash advance is financed. Your lender will either take a percentage of credit card sales or a percentage of total business sales either daily or weekly.
When should I consider a Merchant Cash Advance? If you run a business that has only been in operation for a short time, has a low credit score, deals primarily in credit or debit transactions, or needs cash quickly without collateral—this could be a suitable option for you.
Qualifications and prerequisites: Qualifications for a Merchant Cash Advance are not as complex as more traditional business funding. You will just need to fill out a simple application and provide up to 6 months of past bank or credit card statements.
Application process: Once you have completed the documentation mentioned above, the next step is to simply submit your application. The timeline to receive funding once it's submitted is incredibly short. You will likely hear back about funding within 24 hours and have access to your funds shortly after that.
To reduce the cost of capital on your Merchant Cash Advance, securing an affordable factor rate is important. The first thing you'll need to do is determine how much capital your business requires. If you borrow too much, this can increase the cost of repayment. And on the other hand, if you borrow too little, this could cause a difficult financial situation for yourself.
Funding experts at CBF Solutions Group can help you navigate these details and walk you through your options so you can select a Merchant Cash Advance deal that fits your business's needs.
