A Merchant Cash Advance is the most accessible funding option on the market. This financing option allows you to turn future credit or debit card sales into working capital that you can use today. It is an easy and quick way for small- to mid-sized businesses to obtain an upfront sum of cash even if they lack collateral or have a poor credit score.
Merchant Cash Advances (MCA) are an excellent alternative to business owners with a low credit score with short-term cash gaps. If you need working capital instantly, our Merchant Cash Advance Program comes with faster approvals and funding than any other loan.
With a Merchant Cash Advance, Opportunity Business Loans will give you a lump sum in exchange for a percentage of your future debit or credit card sales. The loan can be paid automatically by debiting the agreed upon daily or weekly amount from your business’ merchant bank account.
This is different from standard loans because it works on pace with your business. With a standard business loan, you will be forced to make fixed payments each month no matter how many sales your business gets. However, which a Merchant Cash Advance, an agreed amount is automatically deducted from the daily sales generated on your merchant account until the advance is paid off.
So the more sales your business has, the faster your loan is paid off. If your sales are lower one day, you won’t be expected to pay the same amount. Instead, the payment will be lower as well.
A common term that you might hear when dealing with a Merchant Cash Advance is “holdback.” This is the percentage of daily credit card sales applied to your advance.
The holdback percentage is usually fixed until the advance is completely repaid. Due to the repayment being based on a percentage of daily sales, the most credit card transactions a business does, the faster they are able to repay the advance.
Most MCA providers charge what is called a “factor rate.” Unlike traditional loans, a factor rate isn’t amortized over the course of the advance.
Since Merchant Cash Advances use factor rates, the repayment process starts as soon as the loan proceeds are deposited into your account.
A conventional bank loan comes with the risk of losing collateral or even hurting your business’ credit score if you make just one late payment. Unlike bank loans, MCAs do not affect your credit score since it is a sales transaction. Additionally, collateral is not required to secure the advance.
This is a low-risk, fast way of getting the funding you need to overcome any short-term business expenses.
The main difference between MCAs and Small Business Loans is a Merchant Cash Advance is considered a purchase and sale transaction. In this case, the financing company purchases a portion of the business’s future revenue stream at a discount.
In contrast, a Small Business Loan is when the financing company lends money to the borrower and the borrower must repay the loan with fixed payments.
Opportunity Business Loans offers Merchant Cash Advances to small and medium businesses in every industry. The most common businesses to apply for MCAs are:
There are various ways in which a Merchant Cash Advance can help your business. The following are the most popular benefits that will help your business boost profits, maximize growth, and increase market penetration.
In just 3 easy steps, you can explore your financing options.
Start by filling out our fast application where you can tell us about you and your business. With just one simple application, you'll have access to over a hundred different lenders.
After submitting your application, our advisors will evaluate your business profile and match you with lenders who can offer the best financing for your business.
Review all your different financing opportunities with an advisor at hand. With so many opportunities at your door, you’ll find the best one to meet all your business needs.
If you have any questions about Merchant Cash Advances for your business, give us a call today. Opportunity Business Loans has a team of friendly customer service representatives that are available 24/7 to assisted you with any questions or concerns that you might have. Don’t hesitate to get the funding you need to take your business to the next level!
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