6 Reasons Merchant Cash Advances Are Becoming More Popular


Minyang Jiang

While bank loans have long served as the traditional method of securing business funding, more and more businesses are abandoning commercial loans and searching for other options to fund their business. Lately, more business have been seeking merchant cash advances to meet their financial needs. A merchant cash advance provides business owners with convenient access to quick money when other solutions turn them away. Here are just some of the reasons they’ve been growing in popularity over the years.

Six Reasons Why Merchant Cash Advances Are Popular

1. MCAs are easy to qualify for.

In this economy, banks are becoming increasingly stringent when distributing business financing. Their rigid eligibility requirements are turning more people away, often leaving entrepreneurs with few options available to them. Many turn to merchant cash advances because they offer a lump sum of money at a fixed rate, and they are easy to qualify for, even for first-time business owners. Whereas a bank loan application takes hours to fill out, merchant cash advance applications consist of a brief questionnaire, enabling business owners to expedite the application process and get their money faster.

2. Cash advances provide money quickly.

With traditional bank loans, application approval time can take weeks, if they even approve your application at all. When business owners are in a pinch, they often turn to merchant cash advances. Approval time is often between 24 and 48 hours, enabling them to access money right away.

3. It’s a friendly option for people with bad credit.

For business owners with poor or nonexistent credit, qualifying for a loan is nearly impossible. Banks need to ensure you’re good for the money, and a history of bad credit is a huge red flag. Merchant cash advances provide an alternative option to those with low credit scores.

4. Payment plans are flexible and tied to sales volume.

Whereas traditional bank loans require you to pay a set fee each month, regardless of business earnings, merchant cash advance agencies take a percentage of the borrower’s daily credit card sales. This allows the borrower to repay the loan at a rate that fits their budget.

5. Merchant Cash Advances don’t require collateral.

Some business owners shy away from collateral in fear that their property will be seized should they default on a payment, whereas others simply don’t possess enough collateral to fully secure their loan. Many business owners are attracted to merchant cash advances for the specific reason that they don’t require collateral. This makes them more widely available to people of all income levels.

6. MCAs typically have lower rates than credit cards.

While many business owners use credit cards to cover routine operational costs, many are turning to merchant cash advances as a more cost-effective solution. Secured credit cards often entail high-interest rates, which can greatly increase your operational costs over time. With lower rates and convenient access to money, merchant cash advances are an economical alternative.

More business owners are turning to merchant cash advances to meet their capital needs. When other lenders turn them away, business cash advances provide a viable option that enables business owners to meet their daily operational costs. Due to the loose eligibility requirements and easy remittance plans, merchant cash advances are the most widely accessible business funding option available. For all your working capital needs, contact Credibly.