As a small business owner, financing your business is probably a constant on your mind. An option when you need access to capital quickly is a merchant cash advance. However, there are some things you should take into consideration before going this route. Here is everything you need to know about merchant cash advances.
WHAT IS A MERCHANT CASH ADVANCE?
A merchant cash advance is an option for small business owners who need some upfront cash for business operations.
HOW DO THEY WORK?
Once you apply for a merchant cash advance, you will receive it in the form of a lump sum of cash.They usually have a shorter repayment term (3 - 12 months) and are processed faster than traditional loans.
HOW DO I PAY THEM BACK?
You can either take a portion of your future earnings to pay it back or you can have fixed daily/weekly debits taken from your account. These payments are taken as a percentage from your credit or debit card sales. The more sales you have, the faster you'll be able
HOW DO I QUALIFY?
Most companies that go this route make a majority of their profit from credit or debit sales. In most cases, the business wouldn't qualify for a traditional loan.
IS IT RIGHT FOR ME?
A merchant cash advance may be the right fit for you and your business if you’re confident that you can repay the advance sooner rather than later. Be aware that interest rates may cause you to pay more than you were expecting. For the most part, you should probably look into a traditional loan first