A Merchant Cash Advance: What Is It?
A lump sum of cash is given to you in exchange for a portion of your company’s future sales when you obtain a merchant cash advance from Main Street Finance Group. This implies that you will get working capital up front, and we will keep receiving a portion of your sales until we get the full amount of sales that we paid for.
Together, you and our fundraising advisors will develop a financing strategy that will help you build your company without using up all of your cash flow. Entrepreneurs that have generated at least $7,500 in sales over the previous three months on average are usually eligible for an MCA equivalent to 70–1200% of capital, ranging from $3,000 to $500,000. There is no set duration, and we provide both fixed and flexible payback schedules.
Rates of merchant cash advances
Instead of using a standard interest rate, merchant cash advances use factor rates. Factor rates are straightforward decimal numbers that indicate how much "extra" you will have to pay over the loan's original amount. Based on a risk analysis, your factor rate is assessed. Factor rates typically range from 1.1 to 1.5.
Who Is Eligible to Request a Merchant Cash Advance?
Cash advances from merchants are perfect for
- Companies in need of quick capital can get MCAs deposited in as short as 24 hours.
- Companies that handle a large volume of credit and debit card transactions
- B2C businesses that need smaller amounts of funding
- Businesses with lower credit scores
- Business owners that do not have collateral, such as real estate and other assets
Restaurants, dentist offices, legal offices, medical facilities, pharmacies, petrol stations, and more can all profit from merchant cash advances. Regardless of the sector you work in, our knowledgeable finance Advisors will collaborate closely with you to determine the optimum finance solution that will enable you to meet your objectives without compromising cash flow.
Who Is Eligible to Request a Merchant Cash Advance?
Apply
Collect three months' worth of bank statements and other documentation. Give us secure access to the transactional data from your bank account so we can approve it more quickly.
Select Funding
Within an hour (during regular business hours), a financing advisor will get in touch with you to finish your application and go over your funding alternatives.
Obtain Money
Within a day of deciding whatever funding option is best for your company, you and your funding advisor can authorize and deposit your funds.
Decide on Repayment
Your company's debit and credit card sales on a daily or weekly basis will be automatically subtracted to cover payment. The amount of your payment will depend on your sales.
Using a Merchant Cash Advance: A Guide
The applications of a merchant cash advance are unrestricted. Generally speaking, MCAs work best when they complement growth tactics that boost your income, like:
- grabbing hold of time-sensitive growth opportunities
- Increasing the scope of your marketing plan
- Buying supplies or raw materials in large quantities
- Modernizing machinery or technology
- hiring additional personnel
- Putting money into education and training
Conditions for Merchant Cash Advances
Generally speaking, only very affluent business owners with real estate and exceptionally high credit ratings are eligible for traditional bank and SBA loans. Main Street Finance Group offers more accommodating approval standards that take into account your company’s whole health rather than just your credit score. To be eligible, your company must take credit and debit card payments; collateral is not needed.
Here are some things we take into account:
- Revenue for businesses
- Money movement
- Payment history of the vendor
- Years of operation
- Records accessible to the public
Q&A on Merchant Cash Advance
Yes, if your company has a healthy cash flow, you might be able to obtain a merchant cash advance even with terrible credit. Alternative lenders with lower credit score requirements—typically beginning at 550—include Main Street Finance Group. For companies with low credit scores, merchant cash advances, invoice factoring, and other alternative small business funding are great choices.
Without bank statements, some alternative lenders might authorize a merchant cash advance, but the charges will be significantly higher. Bank statements and other financial records going back three months are required by Main Street Finance Group.
Regardless of industry, every company that takes debit and credit card payments could profit from a merchant cash advance. Together, you and our team of skilled Funding Advisors will determine your eligibility.
Every company is different. It is always preferable to discuss your situation and determine your eligibility with one of our funding advisors. Generally speaking, we seek out steady income with a minimum monthly revenue of $7,500 or more and a minimum of six months of operation. Since credit scores don’t often convey the whole picture, we also take your company’s potential for growth as a whole into account.
The funding from your merchant cash advance is not restricted by us. We think small business owners are the ones who know best how to expand their companies, therefore even if our team might offer some guidance, the final say in matters of strategy belongs to you.
Since a merchant cash advance isn’t really a loan, it doesn’t have an interest rate. An advance against future sales is known as an MCA. The advance payment is known as a “factor rate,” and it differs for every company.