Merchant cash advance is a source of vital cash for a running business when it is important in short period of time. It is based just on the solidity of the actual daily receivables and credit card receipts.
A merchant cash advance provider makes an agreement to buy a certain amount of money (the advance amount) and pays for the money using future equivalent income. Once the agreement is made, the agreed money is immediately transferred into your bank account. It’s as if you earned the future income months earlier. The amount you pay back is an affordable percentage of your daily card takings. A Merchant Cash Advance allows you to make repayments on your original advance amount through a low cost, fixed percentage of your credit card sales, which will be based on a number of sales from your customers. Most businesses pay off their cash advances within 1,5 years.
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Merchant Cash Advance is the perfect solution for businesses which experience seasonality or ebbs and flows in income.
The merchant cash advanced is not technically a loan, but the sale of money on the installment plan, almost like a rent-to-own system. There is no investigation of your personal credit, only an assessment of your monthly business income to make sure you can afford the payments.
What do you need to do to apply for a merchant cash advance?
Also, read about asset-based lending and decide which type of a loan is better for you!