Merchant cash advances provide small businesses with an alternative from traditional bank loans. Business owners receive funds as a lump sum upfront from a merchant cash advance provider and repay the advance with a percentage of the business’s sales
Merchant Cash Advance Details
- Fast access to cash
- Flexible repayment terms
- Strong credit not required
- You choose how to use
- No collateral required
- Very, very expensive (70% – 200% APR)
- Minimum daily payment hurts cash flow
- Doesn’t help build business credit
- May lock-in merchant processor
- Must accept credit cards
A merchant cash advance is not a business loan but should be considered a cash advance based on the volume of your credit card receipts.