A merchant cash advance is among one of the many funding options you can consider when trying to raise capital. This an ideal funding option especially for small business with urgent cash needs. Like any other funding option, business advance financing has its pros and cons. As such, it is important to have this in mind as you seek a cash advance. Here are some of things to know in regards to a merchant cash advance.
What is a merchant cash advance?
A cash advance is a form of financial assistance advanced to business with pressing financial needs. The amount advanced is offset by a certain percentage the sales made until the entire money is repaid. That said, the amount received is influenced by the volume sales. Ideally, the amount advanced ranges from as low as 50%- 250% of your total credit sales. The repayment period varies from one lending company to another. However, in most companies, it ranges from 3 months to 18 months starting from the day the amount is given.
Benefits of a merchant cash advance
A merchant cash advance has numerous benefits. Below are some of the benefits.
This is one of the things to enjoy about this type of funding. The process of application is not only straightforward but also easy. If you are making an online application, you only to upload the relevant academic documents. This is unlike many funding options, which can be quite complicated at times.
Processing a merchant cash advance takes a short period. Most lending companies scrutinize your documents within a short time and approve your application swiftly. Within a matter of days, you can be sure of having a cash advance.
Flexible repayments options
This is yet another benefit of a merchant cash advance services. Since payments are based on the sales you make, you can only pay a certain percentage of the credit sales. Thus, in case your sales go down, or you fail to register any sales, you do not need to worry about repayments considering that most cash advance merchant provider offer flexible repayment terms.
This type of funding is ideal for businesses with an extensive credit card transaction history. Besides, business striving to grow can take advantage of a merchant cash advance provided they have a decent credit history. More to this, businesses requiring fast cash such as restaurants and retailers can benefit from this fund.
Other benefits of a merchant cash advance include, no collateral is needed when getting the loan, high borrowing amounts, and no perfect credit score is required.