A merchant cash advance (MCA) is a type of alternative funding for your business. The question is whether it’s right for you or not. With an MCA, you can receive an upfront sum of cash in exchange for part of your future sales.
Merchant Cash Advance (MCA)
An MCA has traditionally been meant for businesses that generate revenue mainly from credit/debit card sales. These businesses include restaurants, retail shops, and not only. Today, MCAs are also great for businesses that don’t merely rely on credit/debit card sales.
The MCA provider will automatically deduct a percentage of your future sales until you pay back the agreed-upon amount in full. Typically, you’ll be given a period ranging from 12 months. The higher your credit card sales, the faster you can pay back your MCA.
Why an MCA Can Be the Best Option for You
Here are several key reasons why an MCA can be the right business funding solution for you:
1. Having No Access to Traditional Bank Loans
Not all businesses can get approved for financing from traditional banks or financial institutions. So, if you need additional funds to get your business off the ground or move to the next level, you can opt for an MCA.
That’s where reliable alternative online lenders like FirstAmericanMerchant.com step in to help you with a secure and cheap merchant cash advance. Even if you have poor credit or no credit at all, FAM can be the best helping hand for you. FAM carries an A+ rating with the BBB and is an award-winning business funding provider in the high-risk field.
2. Speedy Cash
MCA providers will advance your funds within a week or so without requiring a lot of paperwork. MCA providers are more interested in your daily credit card receipts to determine whether you can pay back the funds or not.
3. No Need to Provide Collateral
MCAs aren’t secured, so you won’t be obliged to provide collateral. No need to supply business assets upfront to back your MCA.
4. Slow Sales Mean Slow Payments
Your repayment schedule will be based on a fixed percentage of your sales. So, if you have a slow month, you’ll be charged accordingly.
5. Isn’t Good for Businesses Having Experienced a Major Disaster
Businesses that have shut down their business operations because of a financial crisis need a type of financing that isn’t based on daily transactions to pay back the amount.
6. Good for a Starter
MCAs are good for businesses that are just starting and need non-interrupting upgrades.
Reasons Why You Need an MCA
There is more than one reason why an MCA can be the go-for option for your business such as the need for quick access to funds without a rigorous approval process typical of a small business loan.