Merchant Cash Advance

How Merchant Cash Advance is beneficial for your business?



A merchant cash advance is often used when a business must have access to money quickly to cover short-term cash-flow shortages or expenses. However, it bears some major risks and should be paired with other financing alternatives. A merchant cash advance, also known as MCA, provides alternative financing to a traditional small-business loan. Typically, an MCA has an annual percentage rate in the triple digits, even if you only have one vendor. Typically, an MCA contractor will leverage your credit card sales to earn higher interest. Because these types of loans allow very easy credit and have balloon rates, it is wise to consider all other small-business loan options before taking out an MCA, especially if you have no other financing lined up.


Contents:

  1. How Merchant Cash Advances work?

  2. What is industry-standard Merchant Cash Advance rates?

  3. Calculate the cost of a Merchant Cash Advance

  4. Advantages of Merchant Cash Advances

  5. Alternatives to MCAs

 

Payday loans are highly expensive options for acquiring credit and capital, but new businesses owners, especially those who operate small independent businesses, should consider other options before relying on debt to finance their business.



Merchant Cash Advance

HOW MERCHANT CASH ADVANCES WORK

A merchant cash advance company provides your business with a lump sum of capital. But an MCA is not a loan. Instead, that provider is purchasing your future sales, and you will use those sales to repay the funds — plus fees. Merchant cash advance repayments can be structured in two ways:


  1. Percentage of debit/credit card and mobile payments in use
  2. Withdraw fixed amount of money from a bank account


1. Percentage of debit/credit card and mobile payments in use

There is a common model used in the merchant cash advance industry, where a merchant cash advance provider automatically deducts a daily (or weekly) percentage of your debit and credit card sales until you repay the advance in full. Unlike other types of business loans, merchant cash advances do not have typical repayment terms. Coupons are usually based on your spatial and temporal sales as well as your spending habits. Outstanding cash balances can be capitalized back into line with unequipped shopping portals for higher sales volume periods. Consumers have a habit of moving their inquiries around when using their outside credit.



2. Withdraw fixed amount of money from a bank account

Merchant cash advance companies can also withdraw funds directly from a business bank account. In this case, the fixed repayment amount is determined based on an estimate of your monthly revenue and you don’t owe any repayments if your sales do not cover the initially agreed amount. Fixed repayment amounts are sometimes higher if the company finds that the cash reserves you have are not prominent or strengthening and they fear that repayments won’t be paid as per initial agreement. This type of MCA repayment structure can be more suitable if you frequently rely on debit and credit card sales.


Beta Energy Direct helps small businesses to get merchant cash advances from several lenders for a certain amount of funding and gives you a lump sum amount of money right away. You can then quickly repay the money you receive with fees, using a percentage of your future sales. So, don’t get into the hassle of filling out long applications and submitting so many documents and get the business merchant loans by following three simple steps here.

Step One

Apply

Apply for the Business Finance now and get a quote in less than 2 minutes.

Step 2

Approve

Get an instant financial plan and sign the credit application.

Step 3

Receive

Receive the money within next 24 – 48 hours.



What is industry-standard merchant cash advance rates?

The merchant cash advance fee charged by a traditional unsecured loans merchant can look similar to a factor rate. For example, a factor rate may range from 1.1 to 1.5. Usually these companies look at your industry, your years in operation, business financials and whether you use debit or credit cards for transactions to help determine how high of a factor rate you may receive.

 

Is my Business eligible for Merchant Cash Advance?

Businesses whose ability to repay looks riskier usually receive a higher factor rate—and will pay that rate plus any additional fees. Please read below the eligibility criteria and apply for a merchant cash advance now to make it simple and clear.


The factor rate you’ll need to pay depends on a number of factors, including your:

  • Industry
  • Years in operation
  • Your ability to repay
  • Business financials
  • Personal credit score

 

Why should you choose Beta Energy Direct? 

Usually, when a business applies for finance, its credit score got affected. But with Beta Energy Direct, we believe in soft-checking of credit points which doesn’t affect your business’s credit score in any way. 

A merchant cash advance is customized to your company and the quantity of money it generates, providing you more confidence in your capacity to repay the loan. The amount you can borrow is determined by several factors, including your average turnover and the lender’s assessment of your ability to repay the loan.

We have a range of merchant cash advance lenders at Beta Energy Direct, and we can help you find the best one for your business. Don’t hesitate to contact our team right now to begin your merchant cash advance application here.


Advantages of Merchant Cash Advance


Advantages

Fast to fund: A business experiencing cashier’s call can take financing online, which may save time. Since business financing is not limited to traditional companies with at-brick-and-mortar locations, providers are flexible in qualification standards, so you shouldn’t need perfect credit or great collateral. Plus, MCAs don’t typically require physical collateral. Financing is paid based on how fast your business may choose. Unlike other types of financing, you will not be paying based on a fixed interest rate and will only be charged a percentage of your revenue, so payments correspond with your business’ rate of performance.



Merchant Cash Advance Loan

Alternatives to Merchant Cash Advance

You should thoroughly investigate all non-bank alternatives to a merchant cash advance before making a final decision. If you are a start-up, have not had credit in the past, or need funds quickly, you may still fit into some business loan programs.





We have multiple other options for startups to be a part of your new venture. Start your business, and when you reach 3 months of trading, we are here to provide you with a merchant cash advance. Contact us at [email protected] for more details.


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