Six Tips to get Business Funding Through an MCA

An immediate business funding solution for your cash crunch. So, you’re searching online for business funding because you have a financial need that requires immediate financing. Or maybe you’ve been unable to get loan approval through conventional methods. Whatever your reason is for searching for quick business funding, this article has six tips to help business owners get the best Merchant Cash Advance (MCA) for their unique situation.

What is an MCA?

An MCA is not a loan but the sale of future receivables, and you can get a discount for early repayment. It is a business-to-business transaction that involves selling your future credit card sales or a portion of the company’s bank deposits in exchange for the business funding you need now to grow your business. Business funding amounts range from $5,000 to $2,000,000 with terms ranging from 3 months up to 2 years. 

MCA is one of the fastest-growing alternative funding methods in the United States. It is the best alternative funding source for many business owners who are denied a business loan from the bank. An MCA loan can be approved and funded within 48 hours with all the paperwork adequately submitted. 

How Do You Repay An MCA?

Most MCA’s are structured with a daily or weekly repayment plan. You would make payments until the total amount was paid with a set amount from your business bank account or a percentage of your company’s credit card sales. 

What Are The Uses Of An MCA?

An MCA meets the needs of a time-sensitive cash crunch with quick approval and disbursement of funds. The process is simple and handled online, over-the-phone, and with email. Minimal documents are required, and a bank account needs to be verified. There’s no restriction on uses for your MCA, which is often used as a bridge until a more permanent traditional loan can be obtained. Nearly all applicants are approved for an MCA. A merchant cash advance can help you meet your immediate cash flow needs and be used for whatever you need.

Six TIPS For Getting Quick Funding

Is An MCA Right For Our Business Funding Needs?

If you need help navigating finding quick US business funding for your business and would like professional assistance, please contact one of our business funding experts, and we’ll help you get the best merchant cash advance available for your situation.

If you own a small business setup, you might find yourself landing in the domain of business loans for several reasons.

Perhaps you just started a business and require funds to purchase equipment and inventory. Maybe you have had a rough patch in your business and looking for funding options to pay your employees. In the best scenario, your business is blooming and you want to expand it, so you need working capital. Whatever is your reason, finding the right funding source is imperative.

Here are some tips you can use to find the best lender or funding source for your business.

Consider the Category of Lenders

Choosing the right funding option requires you to go through different categories of lenders. You can approach big banks, small banks, and non-bank lender to request funds.

However, funding sources like big banks typically have lengthy loan proceedings and may take longer time to approve the loans. They may have high interest rates. In addition, small businesses struggle to get their loan approved due to their low credit scores.

Non-bank lenders, in this regard make a viable funding source for the newly established businesses. Merchant cash advance, for instance is a funding source that provides instant cash without and hectic or stressful procedure.

Identify the Type of Funding Source Your Business Needs

This is, without a doubt the most important tip you must consider when finding working capital for your business needs. Here is a list of popular financing options businesses can avail according to their needs.

·         Crowdfunding

Business owners can visit Crowdfunding sites to promote their business ideas. They may find people on these platforms who are interested to invest in their business.

·         Invoice Financing

Invoice financing is another funding source in which businesses can sell their paid invoices to the factoring companies and get the funds needed.

·         Online Loans

Online loans for the businesses are relatively a new funding source and can provide faster approvals as compared to traditional bank loans. Businesses can apply online for the funds. Lenders review the application and can approve or deny the funds within minutes.

·         Alternative Financing

As mentioned above, Non-bank lending funding sources includes merchant cash advance. This non-bank lending option is not only easy-to-qualify but also allows businesses to repay as a percentage of their credit card sales.

In general, this alternative funding solution is an advance on future receivables from the merchant or business owner and can give 30 to 40 percent of applied funds. There is no denying that short-term payment solution like MCA are very helpful for small businesses and enterprises, as they need quick funding.

In short, if you are a borrower and have less credit rating and could not secure finance from commercial banks, merchant cash advance is the go to solution.

Final Verdict

Overall, choosing the right funding source can be daunting task if you do not have sufficient knowledge about finance alternatives in the loan market. It is always better to consult an expert like Alternative Funding especially when you are opting for the non-bank lending solution.

Small or medium-size businesses getting funding approval within 24 hours is not an uncommon phenomenon nowadays. The odds are if you run a startup or small enterprise and have a seamless internet connection, getting a funding up to thousands of dollars is not a big deal. This is because of the merchant cash advance industry that has become popular among businesses and startups over the last few decades.

That means if you own a small business that often needs a quick infusion of working capital, merchant cash advance can be one of your options to get funds to keep cash flow running. But while choosing any funding option, it is important to do research to make it the right choice and decision for the business.

If you are considering merchant cash advance as a funding option, it is vital to find out its do’s and don’ts to make the most of it.

Merchant Cash Advance

Dos:

  • Understand Your Agreement

This is, without a doubt one of the essential dos when opting for merchant cash advance. It is vital that you know the correct percentage of daily, weekly, and monthly credit card sale when make partnership with a Broker Company. Understanding the terms and conditions of your agreement will save you from the unexpected surprises in the future.

  • Track Expenses

Tracking expenses of your business is important to determine its standing and the financial decisions you need to take to support it.

  • Use the Funding Option to Access Operating Capital

If you own a seasonal business, know that merchant cash advance is an easy finance option to get you through off -season times; especially when profits are inconsistent. Do use this option to access operating capital to pay debts, make purchase and repairs during low, off-season.

Don’ts

  • Use Merchant Cash Advance for Personal Expenses

Once you choose merchant cash advance instead of a business loan, you cannot use it for covering the personal expenses or expenditures that are not related or linked to the business. Know that It is one of the stipulations in the MCA‘s agreement.

  • Hide the Percentage of Your Business Ownership

This might seem a trivial advice but hiding the percentage of your business ownership when applying for merchant cash advance may have the following results:

  1. Misrepresentation can get your application declined if broker discovers the truth
  2. Misrepresentation may constitute a fraud case on you
  • Alter any Documents

Altering lease date, changing/tempering with expiration date, editing out the bank statements or any other blatant alteration may result in application rejection.

Know that merchant cash advance brokers like Alternative Funding are pro in detecting misinterpretations and alterations. Any such attempt is a fraud and crime and may have legal repercussions no matter how small your alteration is.

Final Verdict

Overall, merchant cash advance is a relatively quick, easy, and straightforward option to obtain operating capital for the small business.  However, before committing to any form of financing, it is imperative to consult reputable broker such as Alternative Funding to avoid early repayments and additional charges.

Experiencing inconsistent cash-flow is one of the vital issues of medium and small-sized businesses. Cash is essential not just to pay suppliers but also maintain inventory and invest in business growth. The businesses looking for cash often need to access to a wide variety of financial aids. And merchant cash advance (MCA) is among the popular finance alternatives. Many business owners and entrepreneurs use MCA to overcome cash-flow issues and cop up with tight situations.

Let’s delve into the details to find out why MCA can be the best finance solution and how it helps in business funding.

Basics of Merchant Cash Advance

The merchant cash advance (MCA) offers young and medium-sized businesses an alternative funding source. The entrepreneurs can use this funding source when their credit and collateral rating is low or lacking.

Unlike conventional and regular loan systems, MCA refers to purchasing a part of credit card sales (business) to get a specific discount. The MCA broker company receives a lump sum amount when a business signs a contract with it. In return, the business (that has applied for MCA) can take out its credit card sales every month until it reaches the contracted amount.

How Merchant Cash Advance (MCA) Helps Your Business

The attractive loan alternative offers many benefits to help your business manage working capital.

Do not let your Business Lose Credit or Collateral

The merchant cash advance (MCA) is a relatively secure way to get cash. Commercial or traditional loans often decrease credit ratings of the small businesses. MCA, however, depends on the future sales of the business. That is the reason you will not see MCA on your credit report.

Remember that losing collaterals is never a risk with this funding alternative, regardless of the rough patch your business is going through.

Because it does not involve unnecessary paperwork, the turnaround of merchant cash advance is quite fast. A conventional loan, on the other hand, can take several months to process and grant cash to a business.

MCA funding is generally available to the business owners in less than seven to eight days. This is, without a doubt, a vital benefit when it comes to fulfilling immediate funding needs.

When it comes to comparing MCA’s approval rates to the regular conventional bank loans, it becomes clear that it has a higher approval rate. In fact, there is a very low percentage of MCA brokers who deny the advances of businesses. Brokers negotiate and discuss with the entrepreneurs if they notice any problem.

One of the biggest problems with commercial loans is that when profit rates are low, businesses face problems paying their monthly installments. With MCA, the case is different, as businesses only have to repay when they make money.

Final Verdict

Overall, the merchant advance cash makes an important funding source for the businesses which are striving to go through a financial crisis. Hiring the services of a professional merchant cash advance broker like Alternative Funding is an ideal way to maximize the funding benefits for your business.

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