What Is a Merchant Cash Advance?


You may have heard of merchant cash advances, but do you truly know what these are? We have made things simple by breaking down what merchant cash advances are, so you can make a informed decision when you next choose to take out any form of cash advancement.

Merchant Cash Advances: What You Should Know

A merchant cash advance is essentially a type of business funding. This is specifically designed to help businesses gain access to cash they require in an extremely flexible manner. When a lender provides a business with a cash advance, they pay it back through a percentage of their customer’s card payments when they should at your business.

These can be great form of borrowing and are suitable for a wide range of different business types and sizes. One of the best things a merchant cash advance is suitable for is when a business has very few assets available. Additionally, businesses who are in need for capital in order to grow but have a limited credit score can also thrive from the use of a merchant cash advance.

Merchant Cash Advances: How They Work

Merchant cash advances work by the business, also referred to as the merchant, borrowing a specific sum of money. The lender then pays it back through payments that your customers make via card transfer. This type of loan can be extremely beneficial and can help your business grow. Unlike a traditional loan, the lender of your choice will work with the terminal provider. This direct relationship will allow them to retain visibility in terms of how much acumen is being moved through your business via card payment. No credit checks are required within a merchant cash advance agreement, and in addition to this, no credit checks are required. This means that the lender will not have to review your bank statements prior to your merchant cash advance agreement. This is an extremely adaptable form of lending, where the borrower only pays when the customer does. This allows for a more confident approach in terms of the merchant being able to afford the repayments.

The amount you are able to borrow will differ, depending on an array of different factors. This may include your average annual turnover amount as well as your current visible affordability in the eyes of your chosen merchant advance lender.

Merchant Cash Advances: Eligibility

Eligibility for a merchant cash advance will depend on a range of different factors. These can include whether or not your business takes card payments. Card payments are how your merchant advance will be paid back, so this is an essential criteria for eligibility here.

Any business who takes card payments will have eligibility in this respect as the lender will be able to clearly evaluate how much you make on average throughout a working month,

If you need cash fast, a merchant cash advance can be a great solution in keeping you on your feet. Always ensure you are borrowing off a trusted lender prior to signing any agreement and ensure that a merchant cash advance is the best solution for you.


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Founded in 1994 by the late Pamela Hulse Andrews, Cascade Business News (CBN) became Central Oregon’s premier business publication. CascadeBusNews.com • CBN@CascadeBusNews.com

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