Why Merchant Cash Advances Can Be the Best Option for Your Business

If your business is new, has no credit history, bad credit or no collateral to offer–you can still qualify for business funding with a merchant cash advance.

In a down economy, traditional lending standards can tighten even further, making the merchant cash advance the go-to financial tool for many businesses. 

What is a Merchant Cash Advance?

Merchant cash advances are not loans, but sales transactions. They are funding options for entrepreneurs or businesses that cannot qualify for a traditional loan from a commercial bank. The merchant advance is the discounted purchase of some of your future credit card sales, in exchange for an up-front lump sum cash advance. The provider of the advance has the right to receive part of your monthly credit card sales to repay all or part of the advance.

Merchant Cash Advance Benefits for Your Business

Advantages of a merchant cash advance include:
  • Low hurdle for approval. Businesses with low credit scores or no credit history may still be approved for a lump sum cash advance. 
  • Quick funding. You can potentially receive funds in a week, since no credit check is required. 
  • No collateral needed. If you have no business equipment or vehicles to use as loan collateral, you can still receive a merchant cash advance.  
  • Simple payback process. Revenue-based collection is used to pay back the provider. The percentage-based payback method means your business won’t be starved of cash at any point. You pay more during busy sales months, and pay less when you sell less.  
  • Uncomplicated renewal. Once the advance is initially set up, it can be quickly renewed.  
  • Will not affect your credit report. Since the advance is a sales transaction rather than a loan, it’s not reported to credit bureaus. 
  • High-risk designation and/or bad credit won’t stand in your way.  

If you would like to learn more about a merchant cash advance, contact Growth Lending Group today.

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