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

Why You Should Rethink the Merchant Cash Advance

For many, the merchant cash advance is surrounded by questions a reputation for high fees – a business’ last option. But experts are saying it is time for businesses and lenders to take another look at the merchant cash advance. It might be more helpful than was previously believed.

The Lending World Has Changed

“The merchant cash industry first started as a product for unbankable clients,” explained Andrew Mallinger, COO of PIRS Capital, in a recent interview with PYMNTS. “It was for restaurants that didn’t have collateral or the credit score to apply for a bank loan.”

However, the rise of alternative lending in the years following the Great Recession – when finding traditional business loans was a huge, growing problem for businesses – began to change the way businesses and the lending world felt about the merchant cash advance. Mallinger went on to say that the “lending world has evolved”, and so has the merchant cash advance. Cash advances do not necessarily mean high interest rates and fees; it might actually be the ideal solution for businesses with immediate cash needs. Businesses are now using cash advances for day-to-day operating costs, equipment and inventory purchases, covering payroll and other needs that a rapidly growing business encounter.

What is a Merchant Cash Advance?

A merchant cash advance involves a financing company advancing your business a lump-sum in exchange for a percentage of your future credit card and debit sales, for a fee. This quick cash can then be used to boost the business’ cash-flow, cover expenses and any other working capital needs. There are many benefits in using this business funding option.

Consider the advantages of working with the team of experts at First American Merchant:

  • High Approval Rate:  Merchant cash advance approval is based on business performance, not personal credit, time in business or financials.
  • Simple “No Hassle” Payback: Your payments are automatically withheld from your credit card transactions. There is no fixed monthly payment.
  • Fast Funding & Easy Renewals: You can have money in your bank in as little as 72 hours. Once approved, you can renew your advance when 50% of your balance has been paid down.
  • Revenue-Based Collections: Our payment is a percentage of your daily sales, so if you have a slow month you are paying back less, if you have a good month, you are paying back more.
  • No Credit or Collateral on the Line: A merchant cash advance is a sales transaction, so they are not reported on credit reports; you can easily qualify for business cash advance bad credit. There is also no collateral required as is often the case with a business loan.

A study by deBanked and Bryant Park Capital in 2016 was conducted to assess confidence in the merchant cash advance industry. The results revealed that 91.7 percent of small businesses in Q1 2016 were optimistic about assessing loans from this segment of the financial services industry. Would you like to learn more about this flexible business funding option? First American Merchant is an industry leading merchant cash advance provider with an A+ rating with the BBB, a large network and a dedicated support staff.