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Merchant Cash Advance: Q&A | Business Cash Advances

This article helps answer common questions associated with business cash advances.

What can merchant cash advance companies do for businesses?

These working capital loans help provide businesses with the necessary funds to succeed. These are not bank loans or small business loans, which means that businesses have a higher chance of approval rates. These tailored funding programs make it far easier to obtain financing for nearly all types of small businesses.

How can businesses use the cash?

Businesses may use the money for marketing, expansion, inventory, cash flow, taxes, payroll, renovation and many other necessary businesses’ needs.

How do merchant cash advances work?

Merchant cash advances are a simple funding process that allows borrowed money to be repaid through future sales, revenues and credit card transactions. Then a small fixed percentage is deducted from credit card sales or daily gross sales until the advance is repaid.

Generally, what are the minimum requirements for applying for unsecured business cash advances?

The most common requirements to pre-qualify for unsecured business loans include the following:

  • Most merchants are required to be in business for a minimum of a certain length of time.
  • Merchants must have a minimum amount of gross sales per month.
  • Merchants cannot have open bankruptcies.
  • Credit card processing is not necessarily required.

How much advance funds can merchants’ obtain?

Most merchant cash advance companies offer a range of 75 to 125% of businesses’ total monthly sales volumes. These values depend on the business’ documentation, application and underwriting process.

Are small business loans and merchant cash advances the same?

No, a small business loan is applied for through a traditional bank. A merchant cash advance loan requires minimal documentation and funds in as few three to seven business days. Merchant cash advance is not based on credit, which gives businesses higher approval rates.

Do all types of businesses qualify for merchant cash advances?

Merchant cash advances work with a wide variety of industries and companies. This includes real estate companies, service related industries, wholesale, restaurants, retail businesses, franchises and a wide range of other industries.


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