Merchant Cash Advance Leads the Way for Small Business Owners


Jeffrey Bumbales

Merchant cash advances have been steadily rising in popularity among small business owners. As a result of the weakened economy, banks have grown more stringent when approving loan applications, resulting in many small business owners being turned away.

Business owners have begun to look beyond traditional lending options in search of more accessible monetary solutions for their business. A merchant cash advance offers numerous advantages and disadvantages to the applicant, all of which should be thoroughly considered prior to applying.

Advantages of a Merchant Cash Advance

A merchant cash advance provides a number of key benefits, which have contributed to their rise in popularity over the years. Some of the primary benefits include:

Easy application process: Unlike other funding options, that often entail encumbering application processes, the application for a business cash advance is simple and often only takes a few minutes.

Minimal qualification requirements: Whereas other funding options require exhaustive paperwork, requiring you to detail your entire financial history and often rejecting applicants with little reason, the application requirements for a merchant cash advance are minimal. As long as you’re a U.S. citizen, at least 18 years old, and earning $1,000 or more per month, you are eligible for this type of funding.

Convenient cash: The average approval time is 48 hours, meaning you have access to convenient cash that is ideal for emergency situations.

Bad credit is okay: One of the primary reasons a loan application is denied is due to poor credit. With a business cash advance, you don’t need to worry about your credit score. Merchant cash advance lenders specifically look at your current monthly income and determine the size of the advance based on how much you earn.

Flexible terms: The flexible remittance terms of a merchant cash advance leads many business owners to choose this as their go-to source of funding. Many loan options require businesses to detail exactly how the money will be spent, providing little flexibility if plans suddenly change. With this funding option, you can spend the money on any business need without restriction.

No collateral: Most loan options require you to provide equal collateral to secure the loan. With a merchant cash advance, the money you receive is dependent on your income, and no collateral is needed.

Disadvantages of a Merchant Cash Advance

While there are a number of benefits that these funding solutions can provide, it’s also essential to consider the disadvantages prior to applying. Some disadvantages include:

Higher factor rates: Due to the large risks involved in providing funding with no collateral and to people with poor credit, cash advance agencies often charge higher factor rates to compensate. For those capable of qualifying for other funding options, it may be a cheaper solution.

Small monetary amounts: For those in need of large amounts of funding, like the capital needed to launch a new business, a business cash advance isn’t the best option. Merchant cash advance agencies offer small monetary amounts to help cover routine operational costs, often around $5,000 to $10,000.

Shorter terms: One of the downsides of this funding solution is that it comes with short-term obligations, meaning you need to be prepared to begin remitting money right away. If it will take you a while to establish returns, then you may want to seek a funding option with a long-term payment plan.

Getting Started With a Merchant Cash

Are you looking for creative funding solutions? A merchant cash advance leads the way for small business owners. This option offers convenient money with minimal eligibility requirements.

With flexible remittances, no necessary collateral, and quick application processes, many businesses relish the convenience and versatility provided by this option. To learn how much you qualify for, fill out our online prequalification request form.