Merchant cash advance companies have been growing in popularity, and they can be a great way for small businesses to get the money they need when they need it most.
Merchant cash advance companies are just what their name implies: A company that gives business owners a cash advance based on future credit card sales. They don’t care about your credit score or your personal assets, all they need is your business’s monthly credit card sales.
When you apply to a merchant cash advance company, they will ask for some information about your business and your monthly credit card sales. They will run the numbers and give you an offer right away (they may call it an approval) or they may do more research if they need to talk with you more.
If the company approves your offer, they will send an employee out to get a sales journal (a record of all your credit card sales for one day) and a list of the top 10-20 most recent transactions from your merchant account provider. They will then tell you exactly how much money they are willing to loan you.
Once you have the money, simply write a check to the merchant cash advance company for the amount of the loan plus fees. They will deposit that check into your business checking account and keep an agreed-upon percentage of your future credit card sales.
So, If you are approved for $10,000 and need it fast, but your business’s average credit card sales per month are only $3,000, you’re looking at paying back about $15,000 total. The great thing about this arrangement though is you don’t have to wait until the end of your next fiscal year to get the money you need when you need it most.
In this article, we learned exactly what a merchant cash advance is and how it works. It’s important to remember that these companies don’t care about your credit score or personal assets, they only care about your business’s monthly credit card sales. So if you need money fast and don’t have the time to wait on more traditional financial institutions, this could be the answer you’ve been looking for.
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