Merchant Cash Advance NYC: Benefits and Drawbacks

A merchant cash advance in NYC can be a game-changer for small business owners struggling to stay afloat.

One of the main benefits of a merchant cash advance in NYC is that it provides quick access to funds, often within 24-48 hours.

This can be a lifesaver for businesses facing unexpected expenses or cash flow issues.

A merchant cash advance in NYC typically ranges from $5,000 to $500,000, depending on the business's revenue and creditworthiness.

Businesses with a minimum of $10,000 in monthly revenue may qualify for a merchant cash advance in NYC.

However, the interest rates on these advances can be steep, often ranging from 30% to 50% per year.

This can lead to a significant increase in the business's debt burden over time.

Ultimately, a merchant cash advance in NYC should be carefully considered and weighed against other funding options.

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A merchant cash advance is a loan product that can be very beneficial for businesses that need cash fast, but don't want to take on the kind of debt load that a traditional loan entails.

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In effect, the lender provides the borrower with a cash payment, in exchange for a portion of future credit card receivables on sales. This is a unique feature that sets merchant cash advances apart from traditional loans.

The repayment time frame for a merchant cash advance can range between 90 days and 18 months depending on the amount of the advance, business cash flow, and monthly sales volume. Unlike most business loans, there is no specific payoff date, as the repayment is made as a percentage of individual credit card transactions.

Merchant cash advances can be beneficial for businesses with bad credit or limited credit history, as they are not a disqualifier for this type of funding. A wide range of loan amounts, estimated terms, and factor rates are available, making this option flexible and dynamic.

Here are some key benefits of merchant cash advances:

It's worth noting that a minimum of two months in business is required to qualify for a merchant cash advance.

A merchant cash advance can be a great option for businesses in NYC, but it's essential to weigh the pros and cons before making a decision.

Fast funding is one of the biggest advantages of a merchant cash advance. You can apply online and get approved quickly, often with minimal documentation required, and receive funding within 24 hours.

Flexible requirements are another benefit, as merchant cash advance companies may work with businesses facing credit challenges, startups, and those with previous financial difficulties. They don't typically require physical collateral and will consider your debit and credit card transactions or business revenue.

Repayment is based on a fixed percentage of your sales, so payments adjust based on how well your business is performing.

However, merchant cash advances can be expensive, with APRs reaching 350% depending on factors such as the lender, size of the advance, fees, time it takes to repay, and business revenue.

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Frequent repayment and debt cycle danger are also significant concerns, as merchant cash advances are repaid daily or weekly, and payments are deducted directly from your incoming sales, which can seriously impact your cash flow.

Here are some key pros and cons to consider:

It's essential to carefully review the terms and conditions of a merchant cash advance before signing away a slice of your credit card sales.

To qualify for a merchant cash advance in NYC, you'll need to meet some basic requirements. These include having a minimum credit score of 500, being in business for at least 2 months, and generating at least $8,000 in monthly revenue.

You'll also need to have a relatively short business loan term, ranging from 2 to 12 months. The good news is that the approval process is generally faster and less complex than traditional business loans.

Here are the specific requirements to qualify for a merchant cash advance:

Keep in mind that some merchant cash advance companies may have additional requirements or restrictions, so be sure to check with them directly.

If you're considering a merchant cash advance in NYC, you might want to explore alternative options first. Traditional loans with collateral or a cosigner can be a viable choice, especially if you have time to plan and improve your credit score.

Online business loans are another option that may overlook barriers such as length of time in business, personal credit score, or revenue requirements. They often come with higher interest rates and shorter terms, but can be more affordable in the long run.

Friends and family loans can also be a good idea, as long as you have clear written terms to avoid personal disputes. This can be a more personal and flexible option, but it's essential to approach it with caution.

If you're unsure about which option to choose, here are some alternatives to consider:

These options may have different requirements and qualifications, but they can provide a more traditional financing solution for your business needs.

To apply for a merchant cash advance in NYC, you can start by filling out the One Page Application on the BizFly Funding website. This process is quick and easy, and you can receive pre-approval in as little as 30 minutes.

You'll also need to submit the last 3 months of your Business Bank Statements, which is a simple step that won't affect your credit score. There's no cost to apply, and it's a requirement to be in business for at least 6 months.

Here are the key steps to follow:

Once your application is processed, you'll receive a few offers to choose from, and the funds will hit your business bank account within 1-2 business days. In some cases, same day funding can be applied.

Applying for a merchant cash advance with BizFly Funding is a straightforward process that can be completed online. You can fill out their One Page Application, which is free and won't affect your credit score.

To get started, you'll need to provide the last 3 months of your business bank statements. This is a simple step that can be completed quickly.

BizFly Funding has a minimum requirement of 6 months in business, so you'll need to have been running your business for at least that long. Unfortunately, no-startups are not eligible for their funding.

Once your application is submitted, it will be reviewed by their underwriters, and a Funding Specialist will contact you with a few offers to choose from. You can expect to receive pre-approval in as little as 30 minutes.

Here are the steps to complete your application:

After you've chosen an offer, the funds will be deposited into your business bank account within 1-2 business days. In some cases, same-day funding may be available.

The return process is a crucial part of the application and process, and it's essential to understand the steps involved.

You'll need to return the item within 30 days of purchase to be eligible for a refund, as stated in the return policy section.

Don't forget to include all original packaging and accessories with your return, just like it's recommended in the packaging section.

If you're returning an item that's been used, you'll need to include a detailed description of the item's condition, which can be found in the item condition section.

The return shipping cost will be deducted from your refund, so it's a good idea to factor that in when planning your return, as mentioned in the shipping costs section.

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The amount you can get with a merchant cash advance can range from $5,000 up to $500,000 or more.

The cost of a merchant cash advance can be high, but the quick funding it provides can be attractive to businesses that need cash fast.

The exact amount a provider offers you largely depends on your company's credit card sales volume, cash flow, and business history.

Factor rates can vary, but for established businesses with strong credit histories, the advantage of quick funding can make an expensive cash advance more appealing.

The approval process is relatively fast, with most MCA applications being just one or two pages long and taking only a few minutes to complete online.

In New York, merchant cash advance providers must comply with specific regulations and laws. N.Y. C.P.L.R. § 3218 governs Confessions of Judgment, which can be used to collect debt. A Confession of Judgment must be filed within 3 years of affidavit execution and can only be filed in the county where the defendant resided at the time of execution or at the time of filing.

If a merchant cash advance provider in New York needs to collect debt, they can use a Confession of Judgment. This process involves filing a document with the court, which will then enter a judgment against the defendant for the agreed-upon amount. The judgment can be docketed and enforced like any other Supreme Court judgment.

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Here are the key elements of a Confession of Judgment in New York:

In New York, merchant cash advance agreements have been scrutinized for compliance with usury laws. The Appellate Division, Second Department, ruled in Principis Capital, LLC v I Do, Inc. that such agreements are not loans subject to usury laws, but rather a valid purchase of future receivables.

To determine if a transaction is a usurious loan, courts examine whether repayment is absolutely required under all circumstances. In the case of merchant cash advance agreements, repayment is often contingent on future receivables, making it a purchase of receivables rather than a loan.

Courts consider three factors in determining if repayment is absolute or contingent: presence of a reconciliation provision, finite term of the agreement, and recourse in case of bankruptcy. A reconciliation provision allows for adjustments to payments based on actual sales or revenue figures, reducing the burden during slower business periods.

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In New York, merchant cash advance agreements must comply with the state's laws on Confessions of Judgment, codified in N.Y. C.P.L.R. § 3218. This includes filing within 3 years of affidavit execution, specifying the county where the defendant resided at execution or at filing, and taxing $15 in costs plus disbursements.

The CFPB has also expanded the definition of 'credit' to include merchant cash advances under ECOA, classifying them as "covered credit transactions." This means that providers will be subject to broader compliance requirements, including anti-discrimination and adverse actions.

Here are the key elements of a merchant cash advance agreement in New York:

In New York State, corporations face specific restrictions on using usury as a defense in lawsuits. These restrictions are outlined in the General Obligations Law.

Corporations are generally prohibited from using usury as a defense, except in specific circumstances. This means they can't simply claim a loan is usurious and avoid paying it back. The prohibition is rooted in the idea that corporate entities are expected to engage in loans under terms they've thoroughly evaluated.

Under New York General Obligations Law § 5-521(3), corporations can defend against claims where the interest rate exceeds 25% per annum, characterizing such rates as criminally usurious.

The defense of usury is strictly a shield against repayment, not a sword for recovery. This means corporations can't use usury as a way to get out of paying back a loan, but rather as a way to protect themselves from being forced to pay back an excessively high interest rate.

Here are the specific exceptions and restrictions for corporations in New York State:

As a small business owner in NYC, dealing with a merchant cash advance can be overwhelming. You have options for debt relief, including negotiating a settlement with the lender.

Negotiating a settlement may be possible, especially if the loan is in default. The lender may request financial information to document your hardship.

A settlement can be a lump sum payment or a payment plan, depending on the lender's terms. This can be a more manageable option than paying the full balance owed.

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Fighting the lawsuit in State Court is another option, but it's often a more time-consuming and costly process. Bankruptcy is also an option, but it's a serious step that should be considered carefully.

In some cases, a payment plan may be possible, allowing you to pay off the loan over time. This can be a more feasible option than paying the full balance at once.