Do you operate a restaurant, retail shop, or similar type of business that receives most customer payments in the form of credit or debit card transactions? If so, you can use this to your advantage to apply for a merchant cash advance. This alternative type of financing provides you with prompt access to a lump sum of cash that you repay through daily cash register transactions.
How You Repay a Merchant Cash Advance
When it’s time to start repayment, the lender automatically deducts a set percentage of your credit and debit card transactions daily, weekly, or according to another schedule determined when you apply for the merchant cash advance. You set up the payments to come out of your business bank account through automated clearinghouse (ACH) withdrawals.
A Merchant Cash Advance is Not a Loan
Technically, this type of financing qualifies as a cash advance and not a loan. That means the requirements to obtain a merchant cash advance are typically not as strict as you would find with a bank loan. You usually receive the advance within a matter of days without needing to offer any type of collateral to secure it. Your future earnings act as collateral instead.
Compared to more traditional types of business loans, a merchant cash advance offers flexibility that small business owners appreciate. This is especially true of those who operate a seasonal business. Because your repayment amount is a percentage and not a fixed amount, you pay more when revenue is up and less when sales are down. The application is straightforward and without a lot of documentation requirements such as tax returns and bank statements.
Are You Looking for More Flexible Financing Options?
Topfund Capital offers the merchant cash advance and other alternative forms of business financing for people who need greater flexibility with qualification requirements and repayment options. Please contact us today to request an application or with any additional questions you may have.