An overview of the simularities and differences between a Merchant Cash Advance and a Business Cash Advance.
A Business Cash Advance is a short term loan that is based on a businesses checking account deposit history and average balance. Pre approval on these loans can take as little as 1 hour to 24 hours and funding can occur as soon as 3 to 5 business days. Money is generally wired directly into the lenders checking account once all the neccessary documents are filed and confirmed.
Repayment is a bit different than a traditional loan in which the lender will make a small withdraw out of the businesses checking account daily until the loan is paid back. The amount of the withdraw is a preset amount and will not change during the repayment period. Loan terms are generally 3 to 18 months depending on the lender and there lending guidelines.
A Merchant Cash Advance is abit different though. These short term loans are based on a businesses monthly credit card volume. Cash Advance amounts will generally range from 50% to 200% of a merchants monthly credit card sales. These also have a very fast turn around, pre-approval in less than 24 hours and funding will occur in 3 to 5 days just like a business cash advance.
Repayment on these occurs daily as well, but the loan is paid back daily through your credit card sales for that day. Just like a business cash advance the amount is always the same until the loan is re-payed. Loan terms are also usually 3 to 18 months depending on the merchant advance company you use.
These lenders like to lend to cash flow clients, such as restaurants, grocery stores, taverns, some service companies
, contractors pretty much anyone who receives payments regulary and makes deposits frequently into there business accounts.
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