A Guide to Merchant Cash Advances for Small Business Owners

The Rules of Thumb blog from MoneyThumb has PDF financial file converters designed for all kinds of different people from all walks of life. A few examples of the type of folks who use our tools are accountants or CPAs needing to speed up the bookkeeping process, the small business owner wanting to convert bank statements quickly, or the everyday man or woman who wants to make their personal finance reconciliation a less stressful task.

Another segment of the population who are using our PDF financial file converters more and more frequently are merchant cash advance agents. We have discussed the merchant cash advance industry on a couple of occasions, in this blog post, Are Merchant Cash Advances a Good Idea for Small Businesses? and this post, Merchant Cash Advance vs. Business Loan: Which One is Better? The information we are providing in today's blog post, with a little help from our friends over at FundBox, should answer any lingering questions you may have about the Merchant Cash Advance industry as it applies to small business owners.

Fundbox has created a complete guide to the Merchant Cash Advance industry for small business owners. We were very impressed with the wealth of information contained in this guide, and when you look at their source list at the bottom of the article, you will be too. They have definitely done their homework.

Follow this link to read The SMB Merchant Cash Advance Guide from FundBox in its entirety. Below is an important section of the guide to help you better understand how merchant cash advances benefit small business owners:

Pros of a Merchant Cash Advance

MCAs offer many advantages. They’re simple, straightforward, and boast fast approvals and fund releasing.

Here’s a closer look at the pros of financing with a merchant cash advance:

Simple application process

MCA application processes are straightforward. For most lenders, you can apply entirely online by completing the application and uploading the required supporting documentation. Supporting documents typically involve credit card processing statements.

Traditional bank loans usually require a lot of paperwork and take longer to process compared to an MCA. A merchant cash advance typically requires substantially less documentation, and lending firms arrive at a decision in as short as two days.

2. Perfect credit is not required

Some businesses have a rough start and because of it, suffer from bad credit. The whole point of applying for an MCA is to get them back on their feet. With MCAs, perfect credit is not a requirement. However, most lenders will require that you meet a minimum credit score in order to qualify for an advance.

3. Flexible payments

When you take out a traditional bank loan, you will have fixed payments which means that you pay the same amount every month or whatever your terms are regardless of your cash flow. This is a struggle for businesses who have slow months.

Payments with a merchant cash advance are much more flexible since the percentage is based on your credit card sales, making your payments proportionate to whatever your business brings in. This means not having to worry about your ability to pay even for low-revenue days.

4. Fast approval and funds release

By the time most businesses apply for funding, they’re already in a bind and need the funds as soon as possible. MCAs are a better option compared to traditional bank loans in this regard. For some lenders, decisions are made within hours as long as they have all requirements and documentation needed. And once the lender arrives at a decision, funds can be delivered in just a few shorts days. In fact, some lending firms guarantee a decision and access to funding within 24 to 48 hours.

5. No collateral

If you do not repay the advance, your company assets are not at risk because there is no collateral requirement for MCAs. This relieves you from the worry about having any personal liability.

We'd like to thank the people over at FundBox for this great guide for small business owners when it comes to merchant cash advances and allowing us to share the link and a portion of the guide. We also want to remind our Rules of Thumb blog readers that MoneyThumb has a PDF financial file converter to match any niche or need, whether you are a merchant cash advance agent or simply Joe Public who needs to convert their personal bank statement, we got you covered!