Merchant Cash Advance Brokers for Small Business Funding

Merchant cash advance brokers can be a game-changer for small businesses in need of funding. They connect businesses with alternative lenders who provide cash advances in exchange for a percentage of future sales.

These brokers often have established relationships with multiple lenders, giving them access to a wide range of funding options. This allows them to find the best fit for each business's unique needs.

Small businesses can benefit from the speed and flexibility of merchant cash advance funding. In some cases, funds can be available in as little as 24 hours.

By working with a broker, businesses can avoid the hassle of applying directly to multiple lenders. This saves time and reduces the stress of dealing with multiple applications.

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A merchant cash advance is a loan that comes from a lender, but it's different from a traditional bank loan. The lender will look at your credit card receipts to determine how much you need and can pay back.

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The contract you sign with the MCA lender will outline the amount you're getting and how much interest you'll have to pay back. Interest rates can vary widely between companies.

The state your business is based in also plays a factor in how much you ultimately have to pay, as some states place limits on interest rates.

For more insights, see: Calculate Interest on Cash Advance

Qualifying for a merchant cash advance is relatively easy, and you don't need years of credit history or collateral to get approved.

Your banking and accounting history, along with solid sales numbers, are typically all you'll need to get approved. Some institutions may require credit checks, but not Arc.

Merchant cash advances are a great option for younger businesses, startups, and enterprises that haven't built up enough credit history to apply for traditional business loans.

They're also a good fit for businesses that experience occasional cash flow disruptions or seasonal drops in revenue, as they can help fill in the gap where your own funds fall short.

To qualify, you'll need to have a business with a good sales history, and your credit score will play a lesser role in the approval process.

In fact, many online lenders maintain no minimum credit score requirements for merchant cash advances, making it possible to get funding even with bad credit.

The main driver of repayment is a business's sales, so your revenue will matter more than your credit score when applying for a merchant cash advance.

This can be especially helpful if your business is new or hasn't built up enough credit, making merchant cash advances an incredibly accessible financing solution.

By focusing on your revenue and sales history, you can get approved for a merchant cash advance even if you have a limited credit history or bad credit.

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Merchant cash advance brokers can be a valuable resource for businesses in need of quick funding. With a merchant cash advance, you can get cash almost immediately, often under 24 hours.

One of the biggest benefits of a merchant cash advance is the speed of funding. Merchant cash advances are some of the fastest financing solutions available, delivering cash quickly to help businesses cover unexpected costs or purchase inventory.

Flexible payment terms are also a major advantage of merchant cash advances. You can choose what payback window meets your needs, such as 3, 6, 12, or 18 months.

Another benefit is that merchant cash advances are available even with bad credit. This makes them a great option for businesses that may not qualify for other types of loans.

Here are some of the benefits and drawbacks of working with a merchant cash advance broker:

Merchant cash advances may come with a higher take rate compared to other types of business loans, like business lines of credit or venture debt. However, the flexibility of merchant cash advances can make them a more attractive option for businesses in need of quick funding.

Merchant cash advance brokers can charge additional fees for connecting you with funding sources, which vary from situation to situation.

These fees can add up quickly, so it's essential to ask about them upfront. You can expect to pay a premium for the convenience of working with a broker.

The overall cost of your merchant cash advance will depend on factors like the company you work with, the terms you agree to, and your state of residence.

Highly qualified businesses often get more favorable terms, but it's crucial to understand the specifics of your agreement.

You may be able to preserve senior financing by getting a merchant cash advance that is subordinated, meaning it funds at the second position.

Consider reading: How to Avoid Cash Advance Fees

The terms of a merchant cash advance can vary, but most are based on your cash flow, making the application process quick and easy.

Most merchant cash advances will come with a principal amount that can range from a few thousand dollars to hundreds of millions of dollars.

The discount rate is the amount the MCA provider "charges", and it's calculated based on the principal amount. If you receive $950K and you owe $1M back, the discount rate is 5%.

The payment period can range from three months to two years, giving you time to repay the principal amount.

Payment frequency is usually done weekly or monthly, allowing you to make regular payments.

Here are the typical terms of a merchant cash advance at a glance:

If you're considering working with a merchant cash advance broker, it's essential to understand the alternatives and options available to you.

Traditional loans with collateral or a cosigner can be a viable option, especially if you have time to plan and improve your credit score.

Online business loans can be another alternative, offering higher interest rates and shorter terms, but potentially more affordable and better long-term options than merchant cash advances.

Friends and family loans can also be a good idea, but make sure to have clear written terms to avoid personal disputes.

On a similar theme: Cash Advance Options

If you're looking for a more conventional small business loan, most banks offer favorable terms, but with longer turnaround times.

You can also consider small business credit cards for day-to-day purchases, which often come with rewards and incentives for new customers.

Other options include installment loans, Small Business Administration (SBA) loans, SBA Economic Injury Disaster Loan (EIDL) program loans, lines of credit, equipment loans, private investor loans, and loans from friends or family members.

Here are some alternatives to merchant cash advances:

A merchant cash advance broker can help you navigate the process of getting a merchant cash advance. This type of financing is perfect for businesses that need capital quickly.

The application and approval process is streamlined and can be completed within minutes. You'll upload your business documents with zero risk.

Merchant cash advances are repaid through small automatic deductions from your business bank account. Payments are predictable, and you don't have to worry about your rate changing at any point during your repayment unless specifically outlined in your contract.

There are two main ways a merchant cash advance provider can withdraw funds from your business: a percentage of debit/credit card sales or fixed withdrawals from a bank account. In the first scenario, the provider deducts a daily (or weekly) percentage of your sales until the advance is repaid in full.

Here's a breakdown of the repayment process:

Your business performance affects your repayment. When your sales are higher, you pay more, and when your sales are lower, you pay the baseline amount.

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You can access up to $250,000 in as little as a few hours through a merchant cash advance, but above that amount may take a bit more time, typically 1-3 days.

Merchant cash advances rely primarily on a business's profitability to determine eligibility, not credit score. However, some lenders may prefer not to work with clients with outstanding loans.

Having bad credit doesn't necessarily disqualify you from getting a merchant cash advance, as many online lenders have no minimum credit score requirements.

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Your business's revenue, or sales, will matter more than your credit score when applying for a merchant cash advance. This makes it a great option for new businesses or those with limited credit history.

You can expect to forfeit a percentage of daily credit card sales towards debt repayment with a merchant cash advance. This is a key factor in determining whether a merchant cash advance is a good idea for your business.

The payback amount for a merchant cash advance will be a larger number than the advance amount, due to a fee called a factor that's charged in addition to the money lent upfront. In some cases, this amount can be far higher than the interest rate on other kinds of loans.

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Merchant cash advances are considered legal, as they're viewed as purchases of your future sales, not loans.

You can find reputable merchant cash advance providers through various sources, including online review platforms and industry associations.

Merchant cash advances are often used by small businesses to cover unexpected expenses or capitalize on new opportunities.

A quick glance at the list of best small business loans shows that merchant cash advances are just one of many options available to business owners.

If you're considering a merchant cash advance, it's essential to research the provider and understand the terms of the agreement.

Some popular merchant cash advance providers include National Funding, OnDeck, and Bluevine, which have been reviewed by various sources.

Here are some of the top merchant cash advance providers to consider:

Keep in mind that merchant cash advances can be a high-cost option for businesses, so it's crucial to carefully evaluate the terms and conditions before making a decision.

When choosing a merchant cash advance provider, consider the speed of funding, as some can provide cash within 24-48 hours.

You should fully understand the requirements and commitments before committing to taking the financing.

If you need a fair amount of cash in a short period of time for a business acquisition, runway extension, or strategic hiring, a merchant cash advance may be a great fit.

Choosing a provider can be a daunting task, but let's break it down. National Business Capital stands out from the crowd with its streamlined process.

Their paperwork requirements are minimal, with no need for collateral or business profitability history. This makes it easier for businesses to get the funding they need.

In contrast, traditional banks often require a significant amount of paperwork and collateral. Here's a comparison of the two:

This difference in paperwork and collateral requirements can save businesses a lot of time and hassle. With National Business Capital, you can get approved in just hours, compared to weeks or months with traditional banks.

Their approval process is also much faster, with a service level that includes a business advisor to guide you through the process. This level of support can be a game-changer for businesses that need funding quickly.

If you're considering a merchant cash advance, know that you can typically apply and receive funding within 24-48 hours.

Merchant cash advances can be a great fit if you need a fair amount of cash in a short period of time to fuel activities such as a business acquisition or runway extension.

You should fully understand the requirements and commitments before you commit to taking the financing.