If your company is in need of funding but is seeking alternatives to a traditional business loan, you should consider a merchant cash advance. This form of financing provides you with a lump sum advance on future credit card sales. You reimburse the lender with a set percentage from credit card transactions until the debt is paid off. These advances are quick to obtain, and you have the freedom to use the funds in any way that will benefit your business. Here are the steps to take to apply for a merchant cash advance.
Before you apply for a merchant cash advance, compare the terms of various lenders that provide this service. Consider the minimum requirements of the provider, the cost of the advance, and the factor rate, which refers to the percentage taken out of future credit card sales to pay for the advance.
Check that Your Credit Card Processor Is Approved
To obtain financing, you need to be sure that your credit card processor is approved by the lender. This means you need to either find a merchant funding provider that will work with your current credit card processor, or switch to the processor that your lender recommends.
Apply for Funding
Applying for a merchant cash advance is generally a much easier and quicker process than applying for a traditional bank loan. You will need to provide documents showing your business’s company structure, financial history, credit card revenues, and projection of future income. For faster approval, have this documentation ready when you apply.
Go Over the Contract
Before you agree on the contract for your merchant cash advance, peruse all the details. Pay special attention to the financial terms and any penalties if you are not able to keep the requirements of the lender. You should sign only after you are fully satisfied that the details of the contract are correct and that this form of funding is right for your business.
For more advice on obtaining a merchant cash advance, contact Prime Wealth Development.