A Merchant Cash Advance is basically an option that gives you immediate capital in exchange for your future debit as well as credit card sales. Unlike other loans, there is no interest rate here and no fixed time period for repayment.
Merchant cash advance can help you raise money in a quick and hassle-free way. Unlike the traditional business loans, merchant cash advances don’t involve extensive paperwork. The process is very simple and straightforward.
There are many merchant cash advance providers who operate online. A couple such providers may even contact you directly by purchasing your details via merchant cash advance leads. If they are satisfied with the documents you provide, they can transfer the money within just about 72 hours. If you are in urgent need of money, either to pay off a debt or purchase inventory, an MCA could be really advantageous.
There are three steps involved in the process of applying for a merchant cash advance.
Step #1 – Setting up your account with an approved credit card processor
Merchant cash advance is an advance that you get against the purchase of future credit card receipts of your business. Therefore it is very important to set up an account with a credit card processor.Each MCA provider works with different credit card processors. If you already have an account with a credit card processor, you need to figure out if this processor has been approved by your provider. If not, you may have to set up a new account with one of the approved processors.
Step #2 – Submitting your application
Although the process of application is the same as that of any traditional commercial loan, the paperwork required in case of Merchant cash advance, is very minimal. The documents that you need to submit include:
- Your credit card processing statements for the past three to six months. (This will give the MCA provider a fair idea about the volume of credit card sales that you make in a month)
- Your bank statements for the past three to six months
- ID proof such as your driving license
- A copy of a voided check
- Your application, duly filled up and signed
Your application will be evaluated based on the duration for which you have been in business and the average monthly income of your business. This might vary from one provider to the other. While some MCA providers may necessitate duration of nine months in business, there may be others who may require at least one year. If the average monthly income of $5000 through credit card receipts should be okay with one provider, another might consider an even lower income.
Step #3 – Evaluating the contract
Once your application for Merchant cash advance is approved you will be required to sign a contract that specifies the amount of cash advance that you are about to receive and the fixed percentage of the monthly credit card receipts that the MCA provider would be receiving in return.It is very important to go through the contract carefully before you sign on the dotted line.
Remember – Merchant cash advance is not exactly a loan. You may get confused with the terms of the contract. As a merchant you are a seller here and not a borrower. You are selling a percentage of your credit card receipts in exchange for the cash that you receive as advance. Apart from the amount that you receive, the amount that you pay and the percentage of credit card sales, you need to also pay attention to penalties if any, in case any part of the agreement fails to be upheld.
Do your calculations and find out how much this cash advance will actually cost to your business. If it doesn’t seem viable, it is better to shop around and check with a few more MCA providers. You can choose from the many that contact you via
Merchant Cash Advance leads.
A few years ago most such lenders would get their products sold through brokers who adopted the traditional door-to-door sales approach to gain customers. In fact this offline selling tactic continued even after Merchant Cash Advances started being offered online.
Merchant cash advances are available easily and there are many individuals and firms that offer them. Yet only one in every 10 brokers would manage to do good business. It is the crises of conscience they feel while hard selling this advance. They feel that the high-interest rates and unfair repayment schedules can end up killing the cash flow of their clients.
As an incentive to increase their sales, MCA lenders have started offering higher commissions to Merchant Cash Advance Brokers. For instance, a $20,000 MCA can get a broker a commission of $2,200. However, most Merchant Cash Advance brokers started resorting to unscrupulous tactics while selling these advances. The reason is that apart from MCAs, these brokers would also sell other short-term small business loans offered by different financing companies.
Most MCA firms and private lenders have now decided to cut down their dependency on third-party brokers. This can be taken as an advantage to the lead generating firms that offer
merchant cash advance leads
Not all MCA providers are similar.While some resort to deceitful practices, many of the Providers have been out of business since quite a few years now. Nevertheless, there are plenty of providers available in the industry, some of whom may even try to contact you directly via
Merchant Cash Advance Leads
The typical borrowers of
merchant cash advances
Loans are always risky and merchant cash advances are not an exception to this rule. You will need a good volume of credit card sales transactions per month. Your business should be in a good condition to be able to repay the advance and yet operate successfully.
It is true that
Merchant Cash advances
Here are the top 3 reasons why small businesses choose merchant cash advances over other types of loans:
They are quick
About 24 to 48 hours is what you may have to wait if you want to get an MCA. In case of other types of loans the time taken from the application submission to the disbursement of advance could be anywhere between one to two months. MCAs seem to be the saviors of small businesses when they are pressed for time.
The paperwork involved in MCA is very less when compared to the other options. In fact many MCA lenders even operate online, making it easy for borrowers to fill up and submit their application along with the necessary documentation. If the lender is convinced, you may even get your loan approved within about 30 minutes of time. The documentation required for an MCA loan include:
- Bank Statement for the previous six months or an year (depending upon the lender)
- Daily credit card receipts for about a month or so to make sure if you can repay
It doesn’t take much time to get this documentation ready, which is why the process of application submission is the fastest here.
There is no worry of losing your home
Merchant Cash Advances
Many may not even be aware of the term merchant cash advance. Nevertheless, with time this industry has come a long way through and is expected to reach up to 10 billion dollars. Merchant Cash Advance for sure is big business.
Merchant cash advances are great options for those businesses that have a large volume of credit card sales transactions. They may work well for retail outlets, restaurants and departmental stores where there is a huge traffic on an everyday basis. A portion of the sales goes directly to the lender’s account whenever you swipe a customer’s credit card on your device.
Although easy to obtain, there are three things you need to know about
merchant cash advances