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Merchant Cash Advance helps small business owners in times of much needed capital


For a small or medium business that does not qualify for a business loan, a merchant cash advance can provide much-needed capital. These funds can be used without restrictions. They can support many activities, including payroll, inventory, advertising, new equipment, remodels, expansions, and emergencies.

Many types of businesses can benefit from this service. Among them are grocery stores, beauty salons, restaurants, auto repair shops, clothing boutiques, dental offices, furniture stores, pubs, spas, fitness centers, and animal hospitals. They include companies with only a few employees, as well as those which have dozens.

The current economy makes it difficult for businesses to qualify for loans. The process is lengthy, and involves personal guarantees, collateral and excessive paperwork. Businesses that do qualify must commit to fixed monthly payments, and restricted use of funds.

Cash advances typically require no collateral or fixed monthly payment. They are fast, have high approval rates, simple application processes, and do not require great credit backgrounds. Many times, these loans can be processed within a few days.

The merchant cash advance qualification process usually involves the following elements. The applicant must own a business. Some lenders require a minimum of six months in operation before an applicant can qualify. Usually, the applicantís personal credit rating must be above 500. However, those who have sub-500 ratings may qualify for alternative loans, such as a starter program.

The business must accept Visa or MasterCard payments from customers. This is due to the fact that the lender is repaid through a percentage of future credit card sales. Often, the business must process a minimum of 5,000 dollars per month in order to qualify.

Another qualification for a merchant cash advance is a business owner must not be involved with any open bankruptcies. Any past bankruptcies must not have occurred within the year prior to applying for the loan. The applicant must be current with her or his rent. Even a one month past-due rental payment may lead to disqualification. Also, any tax lien payments, as well as franchise and royalty fees must be up-to-date.

Methods of payback must be accepted. There are three methods for a lender to collect on a merchant cash advance is its percentage of credit card sales. They include ACH, lockbox, and split funding. Split funding is the most preferable. It involves the applicant switching-over all credit card processing functions to the lenderís preferred merchant.

The lockbox method involves setting-up a separate bank account. All credit card receivables are deposited into that account. After the lender takes its percentage, it forwards the remainder to the applicantís regular business account.

During the loan application process, bank statements from the prior three months, and merchant processing statements from the prior four months must be presented. A final element in the approval process involves character. Friendly and cooperative applicants have much higher success rates than those who are rude and difficult.

A merchant cash advance can provide the ideal solution for business funding needs. It is relatively simple and speedy to process, and offers simple and convenient payment plans.


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