4 Steps to Applying for a Merchant Cash Advance

Merchant cash advances can be a good choice for businesses that either don’t want a traditional loan or might not meet all of the requirements. Compared to a loan, it can be easier to apply and get approved for this type of financing. Your business will receive a lump sum that you will then pay off over time with a portion of your company’s credit card sales.

Here are the basic steps that you will need to go through in order to receive a cash advance.

1. Compare Companies

Before applying for merchant cash advances, you should compare at least a few different lenders. If you settle on the first provider that you come across, you may not be getting the best terms or payment. Look at the terms and requirements of the different companies to determine which one would be the best fit for you.

2. Find an Approved Credit Card Processor

Because the cash advance will be paid back through your credit card sales, you should make sure that you are working with an approved credit card processor. If you have a processor that you would like to keep, you can look for a cash advance company that currently works with them.

3. Submit Your Application

Once you have found a merchant cash advance provider that you like, it is time to fill out and submit your application. The process is generally straightforward and can be simpler than applying for a traditional loan from a bank. During the application process, the lender will likely look into your company’s financial history and credit card sales as well as your current situation and projected future performance.

4. Go Over the Contract

Before signing the contract, it is important for you to go over the details carefully. Read through all of the requirements as well as the penalties for defaulting on them. The contract will also have any details about the amount of money you will receive and the percentage of your sales you will need to pay.

If you have a newer business and don’t think that a traditional bank loan is the right way to go for your company, then merchant cash advances can get you the funding you need. With flexible payments that are based on your credit card sales, it can be helpful for those who experience slow periods or seasonal fluctuations in revenue. Just be sure that you do your research and know all of the requirements before making a decision.


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