Understanding Merchant Cash Advances

When a business is in need of funds there are many places they might turn to. A small business loan might be a possibility, working on getting more customers in an effort to yield better profits might be another option. Sometimes though these efforts a take a lengthy amount of time though as one can never predict consumer behavior and loan applications are not always approved swiftly.

Therefore, if your business is in a bind and you need the additional funds a merchant cash advance might be something to look into. Merchant cash advances help business owners find the funds they need without the long wait. This is a great option for those emergency expenses like business repairs, vehicle repairs, or buying new equipment.

Here is how merchant cash advances work:

  • Companies provide an advanced sum to a business.
  • The borrower usually receives the money in less than week without having to file the usual paperwork associated with a bank loan.
  • The borrower pays back the amount taken plus a fee.
  • The company collects their dues by taking a portion of the business’s credit card sales until the debt is paid.

It is a rather simple process which is why many businesses turn to merchant cash advances rather than going through a bank. Merchant cash advances may be considered a bad credit loan option for businesses.

Merchants who provide the exchange usually collect their advances within a year and payments may differ as they depend on how many credit and debit card exchanges you incur at your business. Some borrowers may benefit from this during slower months when the payments are less compared to a fixed loan where your payment has to be the exact amount owed.

As with any transaction where money is borrowed, find out the terms and conditions of your advance. You’ll want to be sure that this is the right option for your needs and that you’re borrowing what you need, not want.

The Takeaway

Using a merchant cash advance is something to consider to help you with your business needs. Get approved for the money you need without the wait and keep your business from going in the red. AmOne can help you get connected with a merchant cash advance. In some cases you may also find that a small business loan is more suitable for you. Contact our educated Money Coaches to learn more about your options!