Running a successful business requires an ongoing supply of capital. Sometimes, the need for this vital fuel can become urgent, even when the usual funding channels come up dry. This is where Merchant Cash Advances (MCAs) come into play, offering a lifeline to businesses that need fast access to operating capital without accumulating debt.
What is a Merchant Cash Advance?
An MCA is quite different from a traditional loan. It’s a form of financing that is based on your business’s future revenue. An MCA provider advances a lump sum of cash to your business, with the expectation of being repaid via a portion of your future daily credit card sales.
How Does it Work?
The repayment process is automatically handled through your credit card processor. A predetermined percentage of your daily credit card transactions is held back and directly transferred to the MCA provider, ensuring a steady flow of repayments that aligns with your business’s income flow. This method allows businesses to manage their repayments efficiently as it doesn’t strain their finances during lean periods.
Benefits of MCAs
One of the most significant benefits of MCAs is the quick access to cash. The approval process is relatively fast compared to traditional loans – often, funds can be available in as little as 24 hours.
Another benefit is that this type of advance isn’t reported to credit bureaus, meaning it won’t affect your credit score. This makes MCAs an attractive option for businesses with less-than-perfect credit.
Merchant cash advances can be an effective solution for businesses in need of quick, flexible funding. However, like any financial decision, it’s crucial to weigh the pros and cons to ensure it’s the right fit for your business. Contact Latta Commercial Capital today to get a merchant cash advance for your business.