If you run a small business, you are likely familiar with how challenging it can be to get funding from traditional bank loans. One option that many people turn to is a merchant cash advance. An MCA is a way to get funds by selling a portion of your future credit card sales. Before you sign up for a cash advance, get to know some of the features of this funding option.
The Process
Typically, applying for an MCA is significantly simpler than a loan application process. There is only minimal paperwork necessary. The main consideration is usually financial statements proving your monthly revenue. Provided that you can show that you have consistent credit card sales of at least $2,000 each month, you can likely get an advance.
Talk with a representative of the provider to understand the specifics of the process. This will often involve a little ‘getting to know you’ as well as discussing some of the company’s financial basics. Following this, you will need to provide some documentation for underwriting.
Uses
One of the best features of an MCA is the flexibility of funds use. You can use the money as working capital, pay for inventory, to buy equipment and almost any other business use. The only restriction tends to be that it can’t be used for any personal needs. Otherwise, you can more or less use the funding however you like for your company.
Advantages
There are many benefits to using an MCA over a more traditional loan. If you need money for your small business, these are some of the reasons to choose a cash advance:
- Available even if you have poor credit
- Funds can be used for any business purpose
- The application involves little paperwork
- Turnaround time is much shorter than a traditional loan
- No collateral needed
Although some people think of an MCA as being a last-resort funding option for businesses that can’t qualify elsewhere, it can be useful even for other businesses. For example, since an MCA isn’t a loan, it doesn’t involve taking on bank debt. It also avoids the need to give up equity to an investor. The turnaround time means that many organizations can use MCAs to get funds when they need them.
In short, it is worth considering taking on a merchant cash advance for your business. If you need funding, learn more about this innovative option. Whether you have a new startup or an established enterprise, you will be glad you considered this option for your business.
