Merchant Cash Advance: A Business Credit You May Need

A merchant having a phone callA merchant cash advance (MCA) is a significant source of financing for small and medium businesses. Compared to loans from banks that come with strict requirements, merchant financing gives you a cash advance based on your business credit card receipts. Companies like Vyze that provide financing platforms and software for such companies say that these are the potential benefits for your business.

Quick Access to Cash

There is very minimal paperwork required as the provider only considers the returns on your credit card and how long your business has been in operation. Additionally, when your application is approved, it should not take you more than a week to get the money. This is important if you were in dire need of capital. Unlike a commercial loan which can take months to process, an MCA will be available to you quickly allowing you to use the money in the business.

No Effect on Credit Or Collateral

Commercial loans often affect credit and collateral in case of default. However, an MCA is a safe way of obtaining financing as it is a sales transaction. Thus, it will not affect your credit rating, and you are not at risk of losing any collateral. Another added benefit is that even if you have a bad credit history, you will still be able to get the financing.

High Rate of Approval

Compared to commercial bank loans, MCAs have a higher approval rate. It is difficult for your business to be denied the financing because the loan is not based on your finances or business credit.

Simple Pay Back Process

The financing payback is based on business revenue, which means you can pay more during a good month and less during a slow month. The collection policy that is percentage based allows you to grow your business rather than draining the little revenue you might have during bad months.

Owning a business comes with great rewards. However, if you are tight on cash, you can have a hard time. A merchant cash advance assists in making it easier for you as it is a quick, safe way of getting the financing you need for your business.