What Is A Merchant Cash Advance?

What Is A Merchant Cash Advance?

  • March 2, 2023
  • Written by : Elizabeth Beall

A Merchant Cash Advance is an option for businesses that need short-term funding to cover expenses or expand their operations. Unlike traditional loans, a cash advance is based on future sales or receivables, making it more accessible and easier to obtain. The application process is typically straightforward, and cash advances are often approved more quickly than traditional loans.

Overall, a Merchant Cash Advance can be an excellent option for businesses that require quick access to cash. With its accessibility, simplicity, and fast approval times, it can be a useful financial tool to help businesses manage cash flow interruptions or fund expansion projects.

How does a Merchant Cash Advance work?

At REIL Capital, we define a MCA as the quickest and easiest financing solution for small businesses. This is a common hero for many companies in need of immediate working capital, and owners with poor credit.

A Merchant Cash Advance allows business owners to gain working capital as soon as possible, and spend freely with or without a financial plan.

Companies tend to receive a lump sum usually between 80-120% of their monthly revenue. Afterward, you will be charged a percentage of your daily credit card sales or a fixed remittance from your business bank account.

Advantages of Merchant Cash Advance

A Merchant Cash Advance, like any financing option, comes with its own set of pros and cons to consider. Typically, businesses that have been declined by traditional funders may opt for a cash advance.

They act quickly: One advantage of an MCA is its speed – it is one of the fastest forms of business financing available. In fact, the turnaround time for most business owners is just a few days. This is because the approval decision is largely based on the company’s revenue and sales records, so there is typically less paperwork required, which accelerates the decision-making process.

Bad credit is frequently accepted: Another advantage of an MCA is that poor credit is often accepted. This can be a real benefit to business owners who have strong business performance but may not have perfect personal credit scores.

FAQ about MCA

What are the qualifications for Merchant Cash Advances?

Qualifications for a Merchant Cash Advance include the following:

  • Must have been in business for at least 6 months
  • Must have a minimum credit score of 480+
  • Must have $8,000 or more in monthly revenue

How do I start a Merchant Cash Advance business?

Any entrepreneur has the opportunity to start their own business, but as with the majority of start-ups, it requires funding to some degree. To start a MCA business, you’ll want to find a qualified provider and apply for funding by completing an application and providing documentation such as bank statements. Once you are approved, terms will be determined and funds will follow shortly after.

Is Merchant Cash Advance right for your business?

A Merchant Cash Advance is the right financing option for your business if you need immediate working capital. If you believe your business is established and profitable or will be post-funding, then Cash Advances are a great option for you; you do not have to have great credit to be accepted.

If you are in need of working capital, an easy approval process, and quick access to funds, we encourage you to give us a call or apply online for a MCA. This could be exactly what your business needs to overcome the next inventory haul, equipment reorders, payroll period, or more.

2 Comments

  1. Hi, probably I will be a little bit off topic here, however I had been reading your blog and it looks great! Great information on here, very helpful. Totally new to me; Good job.

  2. You did a fantastic job sharing this important information. We should always keep sharing this kind of information.