Tips for Using a Merchant Cash Advance

A merchant cash advance (MCA) is a popular alternative funding source for businesses that might not qualify for traditional loans or other forms of financing. It allows businesses to obtain money from a lender based on their monthly credit and debit card sales, rather than their credit score and other business information. To repay the advance, your lender deducts a daily or weekly payment from your card sales.

While it’s a hugely popular method of financing, MCAs aren’t right for every business. If you’re considering taking one out and using it, here are a few tips to help.

Make Sure It’s the Right Fit

The very first thing that you need to do is determine if a merchant cash advance is the right solution for your business. Excellent candidates include small to medium-sized businesses that do a majority of their sales through credit and debit card sales. Common businesses that use MCAs include those in the retail and restaurant industries, such as small shops, restaurants, and cafes. Your credit card sales are a critical component of determining your eligibility, as an MCA is an advance on future sales. (Click Here To Learn More)