Does Your Business Qualify for a Merchant Cash Advance?

Small businesses may often run into issues obtaining a traditional loan due to credit issues. That is one of the reasons that options such as a merchant cash advance have become increasingly popular. It is important to determine if your company is eligible for this type of funding as well as figuring out if it will benefit the business. Here are a few signs that an advance would be a good fit for you.

How Long You Have Been in Business

Typically, a company that has been in business for more than a year will have success using a merchant cash advance. Most lending companies require at least a year of financial statements to establish credibility. Depending on the financial institution, a business may also have to meet a certain level of monthly sales.

How You Get Paid

The process of obtaining an advance is simple: You receive a lump sum of money in exchange for selling future credit card sales at a discounted price. Therefore, if your company receives payments through either debit or credit cards, you will likely be eligible for an advance.

How Your Sales Look

Many companies operate on thin margins. Typically, a business that has success with a merchant cash advance will have high-volume sales no matter what their margins look like. That enables the organization to maintain a good cash flow.

How Stable You Are

It is essential to understand how an advance works. Unlike other funding methods, you do not need to supply a business plan or capital. The money you obtain can be used to pay bills or invest in new technology. It is important to keep in mind that through this option, short-term costs are slightly elevated, so having stability in your company is important before obtaining an advance.

Depending on your needs, a merchant cash advance can be a great way to obtain capital to grow or operate your business. Learn more about our Merchant Cash Advance program!