MERCHANT CASH ADVANCE
A Merchant Cash Advance (Business Cash Advance) can be understood as a type of sales agreement that eventually involves a small percentage of the future revenue which will be in exchange for a lump sum of money. It takes as few as 24 hours and as much as 72 hours for the approval of the MCA. It’s easily accessible and the business owner gets the cash immediately. The repayment of the debt fluctuates with the incoming cash flow at the business owner’s end.
The Merchant Cash Advance is taken against the credit/debit card payments that a merchant receives on a daily basis. A small percentage – agreed by both the MCA provider and the business owner – is used as repayment. This means that the more the number of credit card/debit card transactions that the business owner gets in a day, the more amount of repayment they will be able to make. This means that if the transactions are low or less, the amount of repayment made will be less.
Contact Zero Point Finance today to learn more about merchant cash advances. We look forward to helping you get started with funding services for your small business.
APPLY FOR MERCHANT CASH ADVANCE TODAY
APPLY FOR MERCHANT CASH ADVANCE TODAY
WHAT ARE THE REQUIREMENTS TO QUALIFY FOR MERCHANT CASH ADVANCE?
Proof that the business has been running for at
least 3 months
Filling out the
Bank statements of
the last 3 months
Card processing statements of
the last months
Additional information once the application
Merchant Cash Advance (MCA) FAQ’s
Is MCA a regulated financing method?
Merchant cash advances are not considered loans, and hence, there are no specific regulations associated with them. Merchant cash advance companies do not need to follow state usury laws, which limit interest rates on certain loans or credit cards.
Up to how much can you get by an MCA financer?
The approved amount could be between $5,000 to $500,000(approximately), depending on the business’s annual credit card sales. However, some lenders offer up to a million.
How important is your credit score when it comes to MCA approvals?
MCA lenders do not use your credit score to evaluate your creditworthiness and calculate the interest rate. They have very low credit score requirements, as they primarily consider merchant account activity.
Which all business purposes MCAs can be used for?
MCAs can be used to purchase new equipment, replenish inventory, or have more money on hand to cover payroll, to make sure the business thrives.
What documents are required to apply for an MCA?
Most applications require your business tax ID number, copies of bank and credit card statements, proof of citizenship, and copies of your business lease agreements. Besides, you might need to answer a few general questions about your business.
What is the annual interest rate you can expect in MCAs?
You can expect an annual interest rate between 40 to 150 %. Sometimes it can go up to 400% as well.
Do you need to open a new credit card processor account or the existing account will work?
Even if you already have a credit card processor account, b you might need to open another one that’s compatible with the lender’s requirements.
How much time do you have to repay the advance?
MCAs are typically short-term and hence, the funding lasts between 3 and 12 months.
What is the repayment term in the case of an MCA?
You need to pay back the MCA to the lender based on your sales percentage. If you get sales and get paid by your credit card processor daily, you will have to repay the lender by making daily payments. But, what you have to pay includes the advance plus fees.
For example, on an advance of $25,000, you can choose to pay back 10% (or a different percentage) of sales daily, weekly, or monthly based on the business’s average credit card revenue per month. That percentage is known as the holdback percentage.
How quick can you expect fund disbursement from MCA institutions or lenders?
Typically, you’ll get the money transferred to your business account within 2-5 days. Sometimes, funds get disbursed within 24 hours of application.
If you think that Invoice Factoring is like taking a loan, you should take a step back and think again.