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Friday, August 16, 2013

Business Cash Advance : A Detail Information

Normally the capital comes as a big problem for small entrepreneurs while starting a new business. Due to less of capital so many small business fails and with that the dream of entrepreneurs. To make it strong many goes to bank or start to sell their personal belongings also like gold, plots etc.

However this may not come as a success for everybody. There is a smart alternative way to start a small business without worrying about the interest to pay or selling own personal items.

What are business cash advances?

A Merchant Cash Advance was originally structured as a lump sum payment to a business in exchange for an agreed upon percentage of future credit card and/or debit card sales. The term is now commonly used to describe small business loans that are repaid in less than 18 months.
Source: Wikipedia.

In this case the merchant cash advance providers, like CapitalForMerchants, RapidAdvance, Advancene, MerchantCashAndCapital provides a lump sum of money. In return they ask for either some percentage of share in the company or a daily basis payout from future income as agreed. The entrepreneur does his business without worrying about paying the money and gives his best in his business. When the business grows and company starts earning money, at that time the merchant cash advance providers get back their money from daily earning or from the percentage of shares they own of that company.

How are business cash advances different from traditional bank loans?

In traditional bank loans, there are many process need to be followed before getting the loan like application process, personal guarantee, start-up fees, long waiting time to get money.
After getting the loan also there are many other primary thoughts like high interest and repayment of the loan.

However in case of merchant cash advance, an entrepreneur does not have to worry about long application process, personal guarantee and long waiting time to get the funding.

Unlike bank loan, in MCA, he has to pay from his future income, which decreases the worry.

As in future, if the company does well and the company earns great money and there will not be any problem to return it from daily earning.

The low factor rates with flexible repayment methods gives relief breathe to the entrepreneur. Industries can growth effectively with MCA.

 Industries which should go with MCA.

Though MCA gives capital of Merchants easily with flexible repayment methods, it does not work for all the industries.
It works perfectly for small industry like restaurants, bars, beauty salons, auto shops, retail stores and more, that do not qualify for regular bank loans.
As these shops gets money from credit-card/ debit card, it is for company to repay the money to MCA from daily earnings with effective tracking.

Best Option to choose from Market.

There are many MCA providers who are providing capital for market and it is always confusing to select one.

I have went through many providers website and did a little bit of research. As per me, I will say Capital for Merchants is the most reliable company to get advance cash.
Facilities provided by Capital for Merchants:

  • No startup fees.
  • No collateral required.
  • 95% acceptance rate with approvals in 24 hours.
  • Up to $500,000 cash within 72 hours without any personal liability.
  • No monthly bills.

Some other websites had condition like:
  • You have been in business for at least 6 months.
  • You process a minimum of $5,000/month in credit cards.


Always do a better research before opting for MCA. If you can help with better ideas then, please write in the comment below. 


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