What You Didn’t Know about MCA Merchant Advance

MCA merchant advance

If you are a small business owner in an urgent need of finances but are not able to get any financial help from the traditional lenders like banks and financial institutions, then approach MCA merchant advance. Merchant Cash Advance is the best source of small business financing. You can use the funds that you obtain from the cash advance providers for daily operations, sustaining cash flow, or for expanding your business.

What is a Merchant Cash Advance?

An MCA merchant advance is not a loan, but it is more like a cash advance. A proprietor of a small company can get this cash advance transferred into his bank account within two days from the date of approval. An MCA provider determines the repaying capability of the small enterprise from their daily credit card sales volume. An MCA provider agrees with the small business owner where they agree to the terms of cash advance like the amount of payment, cash advance, and holdback percentage.

Why choose MCA merchant advance?

MCA is the best source of short-term loan for small companies who are in a desperate need of finances and does not have a good credit history. Here are some of the reasons why a small firm should opt for an MCA.

a) Easy application procedure

Nowadays, business owners are available with various lines of credit and business loans but some have a very complicated application procedure. A proprietor must go for an MCA because it has a very easy and simple online application procedure. A person can easily fill-up the application form and submit it online with the necessary paperwork like statements of bank account, statements of credit card processing, and tax returns. It takes only 2 minutes to fill and submit the application form.

b) Quick funding

MCA merchant advance is known for its quick funding and approval. Once the application form is submitted, MCA providers approve the loan within a few hours and the loan amount gets transferred to the bank account of the merchant within a period of 2-3 days. This is the biggest plus point about this source of finance as it enables small companies to acquire funds immediately.

c) Offers financial assistance to companies with bad credit

Creditworthiness is the basic condition demanded by the financial institutions and bank before they lend any money to the small enterprises. MCA merchant advance providers don’t impose any condition of credit. These lenders are more interested in your daily sales of credit card. Plus, they wish to know how long you have been in business and how many loans you have taken. Also, you should keep in mind that MCA will not improve your credit as the loan taken has not been mentioned in the credit report.

d) Collateral is not required

When you go to a bank to get some loan assistance, it is mandatory for you to submit some collateral security to the bank so that they get an assurance that if you commit any default in the repayment, then they can sell off the collateral property to recover the loan amount. If you enter into a contract with MCA merchant advance providers, then your loan is unsecured as you don’t have to give any collateral to obtain the loan.

e) Flexibility in making repayments

Short-term loans with a fixed rate of interest have a fixed system of repayment, which means that you have to pay a fixed sum of money every month. This can help you a lot in budgeting but at the same time if you are not making much sales, then it can become very troublesome for you.

The providers of Merchant Cash Advance offer flexibility in repayment. You are not compelled to pay a specified amount every single month. The amount paid is based on the sales volume in a month. If your credit card earnings are higher during a month, then you can pay off a higher some of MCA merchant advance, and if the sales are low, then you will only be liable to pay a fixed percentage of the total sales volume.

f) The higher sum can be borrowed

MCA providers give much leverage concerning the amount of loan to be borrowed. Certain firms acquire a cash advance with a limit of 2,000,000 dollars. A traditional loan offered won’t lend such a huge sum of money to a small company. Plus, you have other advantages like no collateral and flexibility of using the money.

Eligibility criteria for MCA merchant advance

It is important for a small business owner to know whether he qualifies for a small business loan or not. If your credit rating is low and your business history is limited, then MCA is the perfect solution for your loan issues. MCA providers set very easy and simple standards of eligibility so that small firms can easily qualify without any problem.

a) Must be operating in the past six months

To become eligible for an MCA merchant advance, a small firm must be in operation for the past six months. If your firm has not completed six months from the date of incorporation of the company, then you will not qualify for a Merchant Cash Advance. Certain lenders set a criterion of 12 months, but generally, the condition is for six months.

b) Other conditions

The company, which applies for a Merchant Cash Advance should have a minimum turnover of 2,000,000. The per month card volume should not be less than five hundred thousand dollars. Moreover, a small business must deal in debit and credit card transaction to acquire an MCA from its providers.

So, this was all about MCA merchant advance. If you urgently need money assistance to buy the stock at a discount, meet your short-term capital requirements, or tap an amazing marketing opportunity, then Merchant Cash Advance is the best option for you.

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