Biz2Credit helps you get access to cash advances; your loan application reaches an extensive network of funding sources.
Biz2Credit Business Startup Loan
Struggles with cash flow can be one of the most critical obstacles to the success of a startup. Even when your startup seems to be thriving, finding funds to meet operating expenses like purchasing office supplies and paying electric bills can be challenging. In the early stages of any business, cash and good credit can be hard to obtain.
A merchant cash advance can provide short-term loans in a lump sum to businesses in exchange for a portion of the company's future credit card sales.
Many small businesses lacking collateral or credit rating to qualify for traditional bank loans are eligible for fast cash advances.
Applying for a commercial loan can be an excellent choice for companies seeking expansion, but if you need a quick cash infusion, a merchant cash advance can help. It's quick and easy, and its repayment is based on your cash flow.
Facts About Merchant Cash Advances
1. What Is Merchant Cash Advance (MCA) funding?
Merchant cash advance is a form of small business funding, similar to fast cash advances, that provides companies with quick access to working capital. A business owner sells a portion of its future credit card revenue to an MCA firm at a discount.
This type of small business financing can be classified as "factoring" or "credit card receivables funding." An MCA is not a loan; there are no personal guarantees required.
2. What are the advantages of Merchant Cash Advance Financing?
- Provides capital quickly when you need to complete a deal, pay an unexpected bill, or simply need more working capital.
- Payment schedules are tied to the success of the merchant's sales, rather than a calendar's timetable. Thus, payments fluctuate based on the borrower's success.
- Large sums of money can be made available quickly. Fast cash advances can be as small as $5,000 and as large as $200,000. Approvals are often made in a few days.
- Credit scores take less importance as MCA funders base their decisions on current operations and upcoming sales projections.
3. What are the Merchant Cash Advance eligibility requirements?
Typically, MCA companies look for the following:
- A business in operation for at least one year.
- Monthly credit card sales of $10,000+.
- Businesses that have not declared bankruptcy in the past year, free from liens and other judgments against them.
4. How does it work?
Essentially, business owners enter a sales agreement in which they sell a portion of their future daily credit card receipts in exchange for an immediate cash infusion. The MCA company buys a fixed percentage of a merchant's future credit revenues at a discount with a typical payback period between six and 12 months.
5. How is repayment made?
There are typically three ways to repay:
- A percentage is taken off each transaction at the credit card processing stage. After each sale is processed, the previously agreed-upon percentage of the transaction is automatically forwarded to the MCA provider.
- A "lock-box" is set up, and the business owner steers all of his credit card sales to it. Sales are divided daily, and the agreed upon percentage goes to the cash advance firm.
The MCA company agrees to have a direct debit from the business owner's account. For more information on Biz2Credit Business Startup Loans, call us at 212-644-4555 or email