From the Blog

What Is A Merchant Cash Advance? A Simple Explanation.

merchant cash advance for yogurt shopA common question amongst business owners looking to secure financing for their business is: “What is a merchant cash advance?”.

Consider this example:

The main dispensing machine in a frozen yogurt shop stops working. The business owner calls for the technician to come and repair the machine. Unfortunately, the tech tells the business owner that it is not possible to repair the machine and that it will have to be replaced.  This is bad news for the business owner, sales in recent months have been down and he doesn’t have the money available to replace the machine. Furthermore, in the recent economic down turn his personal credit has been adversely affected and his bank has already turned him down for a line of credit.

Without the equipment, he has little choice but to close his doors. However, if he can replace the equipment he can keep his store open.

Fortunately, the business owner accepts credit cards as a form of payment and therefore is eligible to apply for a merchant cash advance, which could provide him with the cash he needs to replace a piece of capital equipment.

A merchant cash advance is a sum of money given to a business owner, based on their monthly credit cards sales volume.

The business owner pays off the merchant cash advance with a set percentage of  their daily credit card sales.

This set percentage makes a merchant cash advance flexible – the business owner pays off less on a slow day  and more on a busy day.

Repairing or replacing capital equipment is just one of many uses that merchants use the money to help their business. A merchant cash advance can be used for any legitimate business expense including:

  • Capital Equipment Purchases
  • Payroll
  • Paying Taxes
  • Marketing Programs
  • Supplies
  • Catching up on rent or other bills
  • Advertising
  • Expansion

Your chances of approval are much higher than with a traditional bank loan, as the qualification requirements are much less stringent. This is why merchant cash advances have become such a popular way of getting business working capital.

Get started today by filling out the application form on the side of this page, a representative will contact you quickly. We look forward to doing business with you.