Merchant cash advance (MCA) companies offer upfront capital that is repaid through a percentage of credit and debit card sales, plus fees.
Although it can be a quick financial fix for your business, you should know that MCAs are costly and can lead to a troublesome debt cycle.
However, if you are contemplating this type of funding, you need to understand what to look for in a provider.
Here, we present our recommendations for merchant cash advance companies and offer guidance to assist you in selecting the most suitable provider for your specific requirements.
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Reliant Funding offers a merchant cash advance in as little as 24 hours, with funding up to $400,000.
The repayment terms are based on your MCA agreement, involving daily or weekly installments.
Applying involves submitting basic business information through an online request, and a personal account manager will guide you through the funding process.
To qualify, you should have:
Factor rates are not publicly disclosed on their website, so confirming these with your account manager before accepting an offer is essential.
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Expansion Capital Group provides merchant cash advances ranging from $5,000 to $300,000, with daily or weekly repayments through automatic withdrawals from your business bank account.
Typical repayment terms vary from 3 to 12 months, with factor rates ranging from 1.26 to 1.50.
Applying for the loan is quick and easy. You only need to provide your bank or credit card statements from the last three months.
To qualify, you must have:
Upon application, a dedicated funding manager will provide a quote via email within 24 hours.
Fora Financial offers merchant cash advances ranging from $5,000 to $1.5 million without set terms.
Factor rate information is not publicly available on their website, and you'll need to contact a capital specialist or request a free quote for more details.
The application process is streamlined, typically involving a one-page application and the provision of three months' worth of bank and credit card statements.
Sometimes, you may need to provide additional documents like tax returns, a balance sheet, or a profit and loss statement.
You can get approval within 24 hours, with funds accessible within 72 hours.
To qualify, you'll need:
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Libertas Funding, LLC acts as a primary source of funding for merchant cash advances (MCAs), promoting them under the term 'revenue-based funding' (RBF).
Their merchant cash advances range from $50,000 to $5 million, with 3 to 12-month repayment terms and flexible payment schedules, including daily, weekly, biweekly, or monthly options.
Factor rates range from 1.27 to 1.39, and prepayment discounts of 10% to 25% are available for early advance repayment.
Libertas Funding offers more considerable capital to businesses with slightly higher qualification requirements.
To be eligible, you should have:
To apply for funding with Libertas, you need to fill out a short online form on their website.
Their funding specialist will work with you to complete the process.
After you submit your application, funding will typically be available within 24 to 48 hours.
Nucleus offers a versatile financial solution, allowing businesses to secure cash advance amounts ranging from £3,000 to £150,000.
What sets this option apart is its flexibility, as the terms are tailored to the unique needs of each business.
Speed is of the essence, with same-day decisions and funds typically arriving within just a few days of application.
Businesses can borrow up to 120% of their monthly card volumes, which can be a game-changer in critical moments.
The application process is one of the quickest available, making it an attractive choice for those needing rapid financial support.
Moreover, a dedicated account manager is on hand to provide personalized assistance, guiding businesses through the process.
It's worth noting that a minimum trading history of four months is required, ensuring that businesses have a track record before accessing these beneficial cash advances.
Eligibility criteria include:
Additionally, property ownership is necessary for advances exceeding £75,000.
For Square customers, financing through Square Capital can be one of the simplest and most convenient options.
What sets Square Capital apart is that they exclusively work with a select group of borrowers from their service, making their MCAs more cost-effective than other alternatives.
While there are no strict eligibility prerequisites, Square assesses your processing volume and account history.
If you can demonstrate a consistent track record of credit and debit card sales, you can access between $300 to $100,000.
The factor rates are approximately 1.1 to 1.16, positioning them on the more budget-friendly spectrum for merchant cash advances.
It's important to note that you must repay the entire advance in full within 18 months from the approval date.
Credibly offers merchant cash advances with up to $400,000, and you can apply conveniently through an online application, often receiving approval in as little as four hours.
You will receive the approved funds in your business bank account within 24 hours.
Repayment involves automatic deductions from your daily credit and debit card sales, with factor rates starting at 1.11.
The specific factor rate you receive is contingent on your credit and financial history, with stronger credentials leading to more favorable rates.
Credibly applies a single underwriting fee of 2.5% of the total advance and a monthly administration fee of $50 for payment management.
Typically, businesses complete their repayments of Credibly advances throughout 3 to 15 months, on average.
To qualify, you'll need:
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365 Business Finance specializes in offering financial solutions to small businesses.
With a requirement of only 6 months of trading history and a commendable 90% approval rate, their MSA is accessible to a broad spectrum of businesses.
It's worth noting, however, that if your monthly card sales do not currently exceed £5,000, you'll need to consult with a representative for approval.
One of the appealing aspects for business owners is that there is no need for business plans or security as part of the sign-up process.
Moreover, there are no additional charges, such as administration costs or Annual Percentage Rate (APR).
Repayments are collected daily and cease automatically once you fully repay the loan.
You can benefit from a flexible reimbursement structure, with typical repayments falling within 5% to 17% of sales.
When choosing a merchant cash advance provider, you should conduct thorough research and assessment of various companies to ensure you make the right decision for your business.
Some MCA providers have faced criticism for complex contracts and deceptive sales tactics that can lead to unfavorable financial situations.
Therefore, be vigilant and look for potential red flags when assessing offers.
As you evaluate MCA providers, consider the following factors:
Different merchant cash advance companies have varying maximum funding limits, so ensure the provider's offerings align with your funding needs.
MCA companies charge fees as factor rates rather than traditional annual percentage rates or simple interest rates.
These factor rates can be challenging to understand, so it's important to calculate them into an annual percentage rate (APR) using an MCA calculator.
Inquire about any additional fees the MCA company may charge and include them in your APR calculations.
Different providers have varying repayment methods, such as automatic deductions from credit and debit card sales or automatic withdrawals from your business bank account.
Consider the frequency of repayments, whether daily or weekly, and select the option that best suits your business.
Merchant cash advance companies typically have flexible eligibility criteria compared to traditional small-business lenders.
They often consider factors like your personal credit score, time in business, and annual revenue.
The strength of your qualifications can impact the factor rate you receive. Assess the requirements and ensure they align with your business profile.
Most merchant cash advance companies offer streamlined applications with minimal documentation requirements, allowing quick funding.
Some providers may assign dedicated account managers to guide you through the process, which can be valuable for a more personalized experience.
Choose an MCA that provides clear and transparent information about its products and processes.
Ensure that the company offers multiple avenues for contacting customer service and that you receive straightforward answers to your queries.
Some MCA companies may require you to sign a confession of judgment (cognovit note), which allows them to file a judgment against you in court without prior notification.
It's important to determine whether the MCA company requires this document and consider whether you are comfortable with such a provision.
As previously mentioned, a merchant cash advance (MCA) provides your business with a lump sum of capital.
In return, you commit to repaying the advance by surrendering a percentage of your forthcoming credit card sales.
This financing method is most suitable for businesses that maintain a substantial and consistent volume of credit and debit card transactions, such as restaurants and retail stores.
However, suppose your business primarily deals in cash transactions. In that case, there may be better choices than an MCA for your financial needs.
Understandably, this financing arrangement can appear tricky to some, and some argue that this complexity is by design.
Merchant cash advances companies have often faced criticism for their perceived predatory nature, using intricate numerical terms to obscure the substantial costs involved.
It's essential to know that merchant cash advances typically rank among the more expensive forms of business financing.
For several reasons, asset-based financing is a superior choice for small businesses seeking funding compared to expensive merchant cash advances (MCAs).
Asset-based financing is cost-efficient, transparent, and offers a more flexible repayment structure.
It enables businesses to use their assets as collateral, build or repair credit, and secure financial stability.
In contrast, MCAs come with high, often complex costs for short-term repayment plans and can be detrimental to cash flow.
Myos specializes in crafting custom financial solutions to assist sellers in accomplishing their business objectives.
We present a variety of loan options ranging from €100,000 to €2,500,000, meticulously tailored to meet the unique borrowing requirements of each client.
What sets Myos apart is our utilization of advanced AI technology. All we need from you are your product's ASINs or EANs, along with your order scouting and fulfillment preferences.
With this information, we can perform an AI product assessment using publicly available data and present you with an offer within 24 hours.
Here's why Myos is the ideal choice:
✨ Myos extends its services to businesses of all sizes, including those as young as two months old, without imposing a minimum monthly turnover requirement.
✨ Securing a loan from Myos doesn't necessitate pledging personal assets or guarantees.
✨ A dedicated 12-month timeframe for you to devise and execute your strategic plan with our funding program.
✨ Fast, online application process with funding approval within 72 hours.
✨ There are no early repayment penalties. Instead, we charge a monthly fee based on the remaining capital, eliminating fixed or lump-sum payments.
✨ Myos provides a flexible payment structure where the product score influences the fee, and early repayment reduces the payment. There are no additional costs for early settlement.
✨ A personal Account Manager is always there for any assistance you may need.
Are you interested in learning more?
Sign up today and get a free, non-binding offer!
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