Merchant Cash Advance
A merchant cash advance, also known as a business cash advance, is financing based on your future credit card receivables.
How Much Could I Qualify For?
Merchant Cash Advance Benefits:
|Quick access to capital|
|No credit impact to get a quote|
|Eliminate short term financial needs|
|Flexible payments based on daily sales instead of a fixed amount|
Use Funds To:
|Buy new equipment|
|Manage short term capital needs|
What’s the process?
Apply online or speak with a dedicated business advisor.
Connect Rapid Finance with your credit card processor.
Have funds in as fast as 1 day.
A merchant cash advance, also known as a business cash advance, is a simple and flexible financing solution based on your future credit card sales. You receive a cash advance and then pay it back on a daily or weekly basis by giving your lender a percentage of your credit card receivables until your debt is paid off.
Practically speaking, your merchant cash advance loan can be paid back via automatic withdrawals from your bank account, or directly from your credit card processor, through Automated Clearing House, so you don’t have to remember to make your repayments or risk penalties for missing deadlines.
Of course, as with any business loan, there are fees to pay on top of the amount that you borrow, but with a merchant cash advance these are calculated using a factor rate rather than an interest rate. In other words, the total amount that you owe will be a factor (multiplication) of your loan amount. Factor rates for a business cash advance usually fall somewhere between 1.14 and 1.48, so you need to take this into account when deciding how much to borrow.
An average repayment period for a merchant cash advance is about 9 months, but it all depends how much you pay back with each credit card sale. When working out your repayment schedule, you need to balance your desire to be debt-free with your immediate cash flow needs – the more you hand over from each card sale, the more strain you’re putting on your cash flow until the loan is paid off.
Documents needed to apply
You only need FOUR things to get started:
Government-issued photo ID (Drivers License).
Voided check from your business checking account.
Last three statements from your business bank account.
Last three credit card processing statements.
For example, if your business is less than a year old, or if you have ever filed for bankruptcy, you will usually not qualify for a merchant cash advance loan. Of course, it is also essential that you already have the capability to process credit card payments, and that these play a significant role in your business.
Just like any other means of financing, there are a couple of questions to consider before applying for a merchant cash advance:
1. How does seasonality affect your sales volume?
2. What is your percentage of credit card sales?
Knowing the answers to these questions will help our business advisors to better serve your unique funding needs.
Merchant Cash Advance Features*
A Rapid Finance merchant cash advance gets you the small business capital you need to grow your business. It’s a simple financing solution based on future credit card sales. Reap the benefits of our flexible and affordable payments, as this type of merchant financing is paid on a daily basis as a percentage of your credit card sales. This is a great solution for businesses with fluctuating or seasonal sales or those trying out new products or marketing opportunities. Payments can be made daily or weekly.
Flexible and variable payment periods.
Easy, fast application.
Because of the way that a merchant cash advance loan works, it makes sense for small and growing businesses that rely heavily on credit card sales. If you have strong, regular sales then you can be confident that you’ll be able to pay back the loan without your business taking the hit.
A merchant cash advance is also a good option if your sales are going strong but you don’t have a great credit history behind you. While you might struggle to get approval for other types of business financing, a cash advance for business might be just the right fit.
For the right business and the right circumstance, a merchant cash advance offers certain advantages over many other financing solutions:
- Fast approval
- Bad credit doesn’t have to hold you back
- Flexible and affordable repayments, rather than a fixed amount
- Lower risk than a traditional loan because you don’t have to put up any collateral and your repayments are deducted from actual sales
- No need to manually keep on top of your repayments or face fees for late payments
- You can use your cash advance for a wide range of business purposes, from buying new equipment to bridging payroll.
It is important to be clued up about how a merchant cash advance stacks up against other types of loan, so be sure to speak to one of our business advisors to find out whether it’s the right choice for you.
Other Financing Options*
Other Financing Options*
Small Business Loan
Merchant Cash Advance
Healthcare Cash Advance
Line of Credit
Small Business Administration (SBA) Loan
Asset Based Loan
Commercial Real Estate Loan
*Rapid Finance markets all products listed on this website. Rapid Finance or RapidAdvance is the direct provider of capital for certain Merchant Cash Advances, Healthcare Cash Advances and Term Loans. However, these products as well as SBA Loans, Lines of Credit, Factoring, Asset Based Loans, Commercial Real Estate Loans and Business Credit Cards may be provided by an unaffiliated third-party. Products and amounts offered may vary by state.