Merchant cash capital loans from Merchant Cash Advance companies have been getting more and more popular these days. This is because there is a dissatisfaction that business owners today feel towards banks, as banks have demonstrated themselves to not be business friendly in a recent couple of decades. This void which has been created by banks has been filled by Merchant Cash Advance companies, a process which is created for the business owners, and by the business owners themselves. It has also been getting more popular because of their ease in providing loans online.
While banks come with several problems like restrictions over how you can spend the money or if you can get the money faster depending on your need, Merchant Cash Advance has proved that this is not a policy they follow. Another reason why merchant cash capital loans are much more preferable by business owners than the traditional bank loans is the fact that the loans with Merchant Cash Advance are not essentially loans. Let us explain, while applying for Merchant Cash Advance, you are not essentially getting a loan, i.e. an advance of money that you promise to pay back later with your sales. But instead, you are putting a portion of your projected future credit card sales up for sale. And if the Merchant Cash Advance lender chooses to believe in your project then he/she can invest in your business by paying you for your future sales up front.
But still there are a few more things that you need to know about Merchant Cash Advance before you are able to apply for merchant cash capital loan yourself. So, let us begin by understanding Merchant Cash Advance deeply, its advantages and disadvantages, and finally how you can find the best Merchant Cash Advance lender for yourself.
Merchant Cash Advance
Merchant Cash Advance, as explained above is a process through which small or big business owners attain working capital loans in exchange for their future credit card sales portions. This exchange happens with the help of three parties; the lender, the debtor, and the Independent Sales Organization. To understand their roles in the entire process, let’s look at each of them and how they function.
- The debtor: The debtor in the case of Merchant Cash Advance is the business owner who is looking for merchant cash capital. So, the business owner is in a dire need for working capital, and to attain this loan, he/she approaches the selected Merchant Cash Advance lender with his/her proposal. He/she is the one who receives the working capital loan after the process is complete. And later, the debtor’s future credit card sales pre-agreed upon portion goes to the lender until the loan is repaid with interest.
- The lender: The lender in the case of Merchant Cash Advance is the Independent business loan lender who is associated and recognized by Merchant Cash Advance. The lender provides the merchant cash capital from his/her Merchant Cash Advance company. This lender chooses from the proposals he/she gets from the business owners and lends the money in exchange for a portion of their future credit card sales. He/she is also responsible to hire an Independent Sales Organization for the entire process.
- Independent Sales Organization: In the case of Merchant Cash Advance, the Independent Sales organization acts as the mediator between the lender and the debtor. The organization allows the transactions between the lender and the debtor to take place. The organization also manages to send the portion of the debtor’s credit card sales to the lender, while detaching their own cut from every transaction. Often times, the Independent Sales organization is the only connection between the lender and the debtor after the initial dispatch of the loan.
Now, let us take a look at the process of Merchant Cash Advance.
Merchant cash capital advance processes
Merchant Cash Advance has a simple sequential process. And it works this way; the debtor, who is the business owner, approaches the Independent lender with his/her business proposal. After which the lender accepts his/her proposal and calls the business owner for a meeting. In the meeting, both parties meet at an equal level and negotiate the terms without any restrictions, and only after completely agreeing, do they sign the contract.
Soon after the contract, the lender transfers the loan amount in a lump sum to the debtor. And just after a few weeks, the repayment starts from every credit card sale the business owner makes until the loan is repaid along with interest. Merchant Cash Advance comes with the following advantages and disadvantages:
Advantages of Merchant Cash Advance
There are many advantages to acquiring a MCA Loan. Here are a few of them:
- Fast track process: The whole process of Merchant Cash Advance from the initial proposal to the dispatch of the loan in a lump-sum can take place in just as little time as twenty-four hours! For business owners, this is a rejoicing factor as it helps them spend more time in their business instead.
- Hassle-free dealing: Merchant Cash Advance is designed to ease business owners and help them go through the whole process without any problems. And that is exactly the reason why it does not come with any restrictions. You can easily spend the money however you want and get it as fast as you want.
- No collateral: No collateral is required while asking for Merchant cash capital in Merchant Cash Advance.
Disadvantages of Merchant Cash Advance
Here are some disadvantages of Merchant Cash Advance:
- Higher interest: Merchant Cash Advance comes with higher interest rates than banks. Although they do have higher interest rates, it definitely beats the process that banks put a business owner through.
- Scams: There is a probability that you can run into scams if you are not careful enough while searching for Merchant Cash Advance lenders on the internet.
Finally, let us look at the steps on how you can find the best Merchant Cash Advance lender for you merchant cash capital loans:
- Make a list of top Merchant Cash Advance Lenders.
- Gather reviews, credibility, and expert opinions on all of them.
- Narrow down your list and apply to the final five with your proposal.
- Accept the one that gives you the best deals and attend the meeting to negotiate your terms.
We hope this article helps you find the perfect match for your merchant cash capital needs.