Merchant Cash Advances - What is it & How Does it Work?

 If you're a business owner in need of quick access to cash, a merchant cash advance (MCA) might be the right solution for you. With an MCA, businesses can receive an advance on their future credit card sales, giving them the money they need right away.

Sounds great so far, right? But what exactly is an MCA, and how does it work? Let's take a closer look.

What is an MCA?

A merchant cash advance is a type of funding that allows businesses to receive an upfront sum of cash in exchange for a portion of their future credit card sales. The amount of the advance is based on the business's monthly credit card sales volume, and the repayment is deducted automatically from future sales, making it a convenient way to get the money you need without having to make regular payments.

How Does an MCA Work?

Now that we've answered the question "what is an MCA," let's take a closer look at how they work.


As we mentioned, merchant cash advances are based on your business's future credit card sales. Once you've been approved for an MCA, the funding company will advance you a set amount of money, typically within a few days. You'll then repay the advance plus fees and interest through daily or weekly automatic deductions from your future credit card sales.


The great thing about MCAs is that they're flexible - if your sales are down one week, your repayment will be lower that week. And because there's no set repayment schedule, you won't have to worry about making regular payments or missing a payment if business is slow.

What are the Benefits of an MCA?

There are many benefits of merchant cash advances, which is why they're becoming a popular choice for small businesses. Some of the main advantages include:


Quick Access to Cash - One of the biggest benefits of MCAs is that they provide quick access to cash. Unlike traditional loans, which can take weeks or even months to be approved, MCAs can be funded in as little as a few days. This is ideal for businesses that need cash fast to take advantage of a time-sensitive opportunity or cover unexpected expenses.

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