When your service-oriented business needs a quick infusion of cash, a merchant cash advance can make the ideal solution. Once approved for this type of business financing, you receive a lump sum of cash from the lender. You need to accept credit card payments from your customers to qualify for a merchant cash advance. That is because the lender deducts a set percentage from your credit card cash register receipts each working day. The lender also adds interest to the total to determine the percentage to recoup daily.

How a Merchant Cash Advance Works and Types of Businesses That Could Benefit Most

Historically, businesses like restaurants and retail stores have been the biggest applicants for this type of funding. Many lenders have now opened this up to other types of businesses that receive credit card payments but perhaps not as often. A travel agency is a good example. Companies that have expanded this offering also offer the option of remitting payments via Automatic Clearing House (ACH) from your business bank account instead of from daily cash register receipts.

Benefits of Taking Out a Merchant Cash Advance

Unlike applying for a bank loan that can take several weeks to a few months for approval, you can receive the proceeds from a merchant cash advance in about one week. The documentation requirements with your application are significantly less as well.

Because cash advances are unsecured, you don’t have to worry about losing business or personal assets if you experience an emergency and have a difficult time with your repayment obligation. However, you may need to sign a personal guarantee. This makes you responsible for repaying the debt regardless of circumstances.

A merchant cash advance can be especially attractive for businesses with seasonal fluctuations. This is due to paying a percentage of credit card receipts rather than a flat dollar amount.

Prime Wealth Development offers cash advances for business and several other alternative financing options. Please contact us today to learn more.