Merchant Cash Advance - Beginners Guide

The first thing you need to know about cash advance is that it is different from a bank loan

. As a beginner, you need to know the differences between the two so you know what each can offer to your business needs.

Differences between Cash Advance and Bank Loan

Approval rate Cash advances have higher approval rate compared to banks. If you own a small or medium enterprise, you will probably be turned down in getting a bank loan. On the other hand, getting a business cash advance is a lot easier for any type of business especially the new and growing companies.

The reason why MCA providers have a higher approval rate is because they know a way on how to minimize the risks when offering funds and capitals to small businesses.

Funding Obviously, if one applies for a working capital, it means that their business is in need of cash. Money is very important in growing companies, yet it is still quite difficult to raise while still developing. If you go for a bank loan, it will take you weeks or even months before you get the money. At that time, your business might already be in its worst state. MCA providers are designed to let business owners get the money they need in less than a week, or sometimes in as quick as 48 hours.

Collaterals MCA providers do not accept collaterals. Banks however, need some form of collateral from you so theyll have something to go after if you are unable to pay the loan. But with a business cash advance, there is no need for any collateral. The repayment process will depend on your companys future credit card sales. Another thing is that, with a merchant cash advance, there is no fixed deadline on the repayment. You pay as long or as quick as your company can. That is one thing that most business owners go for with MCA.

Small companies also need a chance to prove their capabilities in the wide and competitive business industry. With the needed capital, they may be able to raise their monthly sales and even build a bigger and more powerful company. This is what MCA providers offer to small business owners. They help you get your business back on its feet while they also earn a percentage from your credit card sales without seizing anything on your behalf.

by: John Gotidoc

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