Merchant Cash Advance, Corporate Cash Advance, Business Credit

Merchant Cash Advance, Corporate Cash Advance

, Business Credit

Merchant Cash Advance 101

As a second generation business owner and entrepreneur, the most important consideration must and always should be; creating and managing access to capital. I know that many business owners would say their focus is sales, developing new products or even marketing. I absolutely disagree. I've found that the most successful business owners and entrepreneurs are those that have developed the skill to always create, develope or find an ever increasing supply and source of working capital.

Consider for a moment, all of the best laid marketing plans, sales strategies or advertising campaigns, means absolutely nothing without capital. So, again I say the focus has to be on developing the skills to create, develope and find new ways to to access capital.

Now, in our current economy, accessing capital is an even greater challenge than it has been in recent years. Banks and traditional lending institutions have greatly increased the criteria they use to approve new loans, lines of credit and business loans. Eventhough, the government has spent billions bailing them out, they still simply are not lending to businesses.

One very popular alternative business owners have turned to as a solution is Merchant Cash Advance lenders. These lenders do not base their approvals on the business owners and/or the business's credit to determine if they'll lend money. As a matter of fact, it's not even a loan! These companies simply advance the business owner an amount ranging from 50% to 200% of their average credit card processed sales. So, if a business is processing $10,000 per month in credit card sales; which include Mastercard, Visa, Discover and American Express, they can get a Merchant Cash Advance from $5000 to $20,000.

Merchant Cash Advance lenders are typically very fast at giving the business owner an approval and wiring the advanced funds directly to the business owners account. Funding usually occurs within 3 to 5 business days. Merchant Cash Advances can range from as little as $2000 to as much as $750,000. Of course, Merchant Cash Advance lenders have to manage risk and will issue an approval amount accordingly. They take into consideration, how long the business has been established, how long the business has been at their current location, any excessive bad credit or liens and the consistency of the businesses sales volume.

Repayment of a Merchant Cash advance is most often very convenient as well for the business owner, because most Merchant Cash advance lenders use a "Split-Pay" program where the business owner transfers their current credit card processing over to the lenders' preferred processor and they deduct a percentage of daily credit volume and apply that amount toward the repayment of the advance. The "Split can range anywhere from 15% - 30% depending on how long of a repayment term was set.

Of course, the Merchant Cash advance lenders are certainly out to make a profit, and in most cases a pretty hefty profit, for providing such an in-demand service to fill the vast void in funding opportunities available to businesses in our current economy. The Merchant Cash advance lenders typically set a factor rate ranging from 15% to 45% of the advance amount. Though the cost of funds are high, the fact that there are no fixed payments made and that repayment is always taken back automatically as a percentage of sales; many business owners find it an extremely suitable option.

Over the next few posts, we'll get into detail and look at some specific ways business owners are making Merchant Cash Advances work for them. We'll also examine and review several prominent Merchant Cash Advance companies and their programs.

See you soon,

Rev E. Lee

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