A merchant cash advance is a financing option that allows businesses to receive a lump sum of cash in exchange for a percentage of future credit card sales.
This type of funding can be a good option for businesses that need cash quickly and don’t have the time or creditworthiness to qualify for a traditional loan. Here are some reasons why a merchant cash advance may be a good source of business funding:
Fast approval and funding: One of the biggest benefits of a merchant cash advance is that it can be approved and funded much faster than a traditional loan. This is because the lender is primarily concerned with the business’s credit card sales rather than its credit score or collateral.
No fixed repayment schedule: With a merchant cash advance, there is no fixed repayment schedule. Instead, the lender takes a percentage of the business’s daily credit card sales until the advance is paid off. This can be a good option for businesses that have fluctuating sales or want more flexibility in their repayment plan.
No collateral required: Another advantage of a merchant cash advance is that it does not require collateral. This can be especially helpful for businesses that do not have assets they can use as collateral or do not want to put their assets at risk.
Simple application process: Applying for a merchant cash advance is generally much simpler than applying for a traditional loan. The application process is usually straightforward and requires minimal documentation.
No impact on credit score: One final advantage of a merchant cash advance is that it does not impact the business’s credit score. This can be helpful for businesses that are trying to maintain a good credit score or that may not qualify for a traditional loan due to a low credit score.
Overall, a merchant cash advance can be a good option for businesses that need cash quickly and don’t want to go through the hassle of applying for a traditional loan. Just be sure to carefully consider the terms and fees associated with this type of financing before moving forward.