Understanding Merchant Cash Advances

In the world of business financing, there’s a plethora of options available to entrepreneurs. One such option that has gained popularity among small businesses is the Merchant Cash Advance (MCA). But what exactly is it, and how does it work?

What is a Merchant Cash Advance?

A Merchant Cash Advance is not a loan. Instead, it’s an advance payment against your business’s future income. An MCA provider will give you a lump sum, which you then repay using a percentage of your daily credit card sales.

How Does It Work?

Once you’ve been approved for an MCA, you’ll receive the funds in your business account. The repayment begins almost immediately. Every day, a set percentage of your credit card sales will go directly to the MCA provider until the advance is paid in full.

Benefits of a Merchant Cash Advance:

1. Quick Access to Capital: One of the primary benefits of an MCA is the speed. Businesses can get approved and receive funds in as little as 24 hours.
2. Flexible Repayment: Since repayments are based on a percentage of daily sales, on slow business days, you’ll pay back less, and on busier days, you’ll pay back more.
3. No Collateral Required: Unlike traditional loans, MCAs don’t require collateral, making it a less risky option for business owners.
4. Higher Approval Rate: Businesses that might not qualify for traditional loans due to poor credit can often get approved for an MCA.

While MCAs can be a lifeline for businesses in need of quick capital, it’s essential to understand the terms and ensure it’s the right fit for your business’s financial situation.

At Foley’s Faster Payments, we help and guide our clients through the whole process to ensure they get the best deal and maximum amount available while explaining the benefits and future costs so they can manage their finances in a better way.