Struggling With Cash Flow? Try A MCA
Companies that do not have assets to issue as collateral for loans or have limited credit scores have difficulty accessing funding from traditional lenders. Procuring a merchant cash advance from private lenders will assist you in boosting your business as you repay using your future income. The MCA works even for startup businesses. The following explains how you can solve your struggling cash flow through MCA.
Who Is Eligible for A Merchant Cash Advance?
A Good Financial Report
You must have a business bank account and a credit card that has been active for the past 3-to 4 months. The MCA lender will check your financial records on the volume of transactions done by customers to minimize their risk.
The lender will consider your total income, credit card transactions, and future performance to ascertain if your business can pay about 10-20% of the MCA. Your current financial situation and company structure are essential determinants for your MCA.
Working With An Authorized Credit Card Processor
To acquire a merchant cash advance, prospective moneylenders will need assurance that you can fulfill your obligations. Because the payments are transacted automatically from your credit card processor, you should ensure that your credit card processor is authorized.
How long has your business been operating? Most lenders prefer working with companies with a steady past and who demonstrate experience. Some lenders need at least six months of trading experience. Many other lenders want a trading history of one to two years.
How Does A Merchant Cash Advance Function?
This type of advance works by the enterprise borrowing finances from the lender. The entity later pays it back via customer card payments. As with other categories of business loans, you can use the funding any way you prefer to expand your enterprise.
With a merchant cash advance, the moneylender works directly with you to determine how much money is going through your company. Unlike other types of loans, no credit checks or a thorough look at your bank accounts are required.
A merchant cash advance is customized to your business and the amount of money, giving you more certainty about your ability to repay the loan. Several factors determine the amount you will borrow, including your typical turnover and the ability to repay.