What You Need to Know About Merchant Cash Advances

Merchant Cash Advances

What You Need to Know About Merchant Cash Advances


Owning a small business can be an incredible challenge, particularly when it comes to managing the financial aspects of your business and your aspirations for growth with about merchant cash advances. Unfortunately, gaining financing for a new small business is often very difficult. If you haven’t owned your business for at least 2 years and don’t have collateral to put up, you are unlikely to convince a bank to extend a traditional business loan. A small business working capital advance offers you the opportunity to borrow additional operating funds against your future receipts without many of the strict requirements of traditional loan products.

While having access to funds within just a few days as opposed to several weeks or even months with traditional loans seems convenient and appealing, it is important to understand all aspects of this type of funding so you can make a confident decision about what is right for your business.

Things You Need to Know About Merchant Cash Advances:

  • Merchant advances are exactly as they sound: funds loaned in advance against future earnings. In other words, you are borrowing against your business’s future earnings, necessitating consideration of your earnings when determining the advance amount.
  • In addition to reviewing records of your merchant account activity, merchant cash advance resources will also review your bank accounts to get a full view of your financial activities and potential. This allows them to determine an amount for your advance that is helpful for your needs while also minimizing the risk
  • When telling you the amount they are offering as your advance, the company will also tell you how much you must repay. Your bank account will automatically be charged for the payments according to prearranged schedules and billing cycles. Be sure to carefully review this to determine the actual amount of the interest and if this is something your budget can handle
  • A merchant cash advance has a shorter repayment period that most loans. In general, you must fully repay the advance and the interest within a 6-month period.

Give us a call to learn more about cash advances so we can help you determine if this approach is right for your small business funding needs.