Give us a call for more info 1-800-210-5649
Skip to content

Key Considerations When Choosing a Cash Advance for Your Business

For many businesses, traditional loans are simply not an option. Startups lack the financial history lenders want to see. Some business owners do not have a strong credit score. Others find themselves in an industry bank considered “too risky” to work with. In other cases, a traditional loan is simply not the best option available.

Whatever the reason may be, more and more business owners are turning to alternative financing options, like merchant cash advances. These financing solutions are known for being fast and flexible, providing funds when companies need them most. As cash advances have grown in popularity, the market has been flooded with providers. Presenting a new challenge of trying to figure out which provider is right for your business.

Knowing what to look for in a merchant cash provider can be confusing. Here are some tips and a breakdown of what a cash advance really is that should help you secure the best terms possible.

What is a Merchant Cash Advance?

First of all, what is a merchant cash advance (MCA)? A cash advance provides a lump sum payment to a business in exchange for an agreed-upon percentage of the business’s future credit and debit card sales – an unsecured advance on your future earnings. Two of the biggest advantages of this type of funding are that (1) funds are received very quickly, in as little as 24 hours, and (2) the repayment process is incredibly flexible. When business is good, the business can pay back more. When the business hits a slow season, it can pay backless.

What to Consider When Choosing an MCA Provider

Before you apply for a cash advance, it is incredibly important to know that not all companies are created equal. Every business and industry is different; you need a provider that understands the challenges you face and offers customized solutions.

Go over the fine print. Some providers will have hidden fees in their funding agreement. So, make sure you go over every detail, no matter how small it may seem.

Look for flexibility. Some MCA providers will require a predetermined or set amount. It’s important to make sure the company you choose prioritizes flexibility. You never know when you’ll experience a slump, so you need a provider that will work with you during those slow periods.

Seek out industry-leading support. Will the provider get back to you within a couple of days? Or are they leaving you hanging for weeks? Will they provide funds in as little as 24 hours? Or will you be waiting an unknown period of time for much-needed cash? Make sure the provider offers great support around the clock.

If you’re in need of a merchant cash advance, consider the team of experts at FAM. Enjoy a simple “no hassle” payback, revenue-based collections and fast funding, and easy renewals. You can receive your cash advance in as little as 72 hours.