Small Business Merchant Cash Advances: Frequently Asked Questions


Do you own a small business and are in need of some extra cash flow? If so, you may want to consider the option of obtaining a merchant cash advance (MCA). If you are not familiar with this small business financing, taking the time to review the frequently asked questions below can help you to determine if an MCA is the right financing option for you.

Is A Small Business Merchant Cash Advance A Traditional Small Business Loan?

Small business cash advances are not traditional small business loans. Instead, these loans are provided to small businesses by the company that processes their debit and credit card sales transactions. These nontraditional loans are also referred to as MCA.

What Requirements Are Used To Determine Eligibility For A Merchant Cash Advance?

One of the reasons that many small businesses prefer an MCA over traditional business loans is that this type of financing is much easier to qualify for. In fact, many lenders that offer this type of loan do not even require a credit check in order to qualify. Instead, your eligibility will be based on your history of debit and credit card sales. The more sales you have each month, the more money you will be able to borrow.

Do You Pay Interest On A Merchant Cash Advance?

Small business merchant cash advances do not come with a traditional interest rate. However, this does not mean that there are no fees associated with getting a cash advance. Instead of charging interest over the life of your loan, an MCA will come with a flat fee that is added to your total repayment amount at the beginning of your loan. With this type of fee, you will know exactly how much your loan will cost you, and you won't have to worry about your cost increasing if you are only able to make the minimum monthly payments on your loan.

How Is A Merchant Cash Advance Repaid?

There is no set payment made on a small business merchant cash advance each month. Instead, the lender that provided you with your MCA will keep a set percentage of any debit and credit card sales that you have until your loan is paid in full. This type of repayment schedule helps to ensure that you never end up with a loan payment that you cannot afford since you will only need to make a payment when you actually have a sale.

For more information, contact a small business MCA loaner near you—such as UrLendr.


12 May 2022

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