If your business needs cash quickly and has a readily ascertainable history of credit card receipts, the Merchant Cash Advance may be what you need. SpotOn Financial a national leader and provider of working capital has partnered with Mr.Checkout.Net to provide members rate discount Merchant Cash Advance Loans. Unlike others within the industry our loan rates start at *9.95% with terms up to 5 years. Our repayment terms can be daily, weekly, or monthly! We charge no upfront fees and can fund in as little as 7 to 14 days. Our company is focused on providing value, low cost rates, and simple terms. So if you need working capital to buy equipment, pay your distributor, reduce your expenses, or grow your business consider working with SpotOn Financial.
What is a Merchant Cash Advance?
A Merchant Cash Advance (MCA) facility can provide business borrowers with an upfront fixed amount of cash. The funding amount is based upon a percentage of the businesses credit card receivables using historical credit card receipts and bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily, weekly or monthly basis until the obligation has been met.
The MCA is not technically a small business loan, but rather an advance on credit card sales. MCA’s are not limited in what rates they charge and what terms they establish. For this reason it is very important for a business owner to be completely aware of how the MCA product works and how it could affect their business.
Is Your Business Eligible for Merchant Cash Advance?
Merchant Cash Advances are available for most businesses that have regular credit and debit card sales. The most popular industries include restaurants, convenience stores (c-stores), gas stations, hotels and many other retail and service business. Depending on the provider there may be a minimum amount of historical credit card receivables required as well as a minimum length of time in business. Typically no traditional collateral such as machinery and equipment, real estate or inventory is necessary to secure a cash advance however some providers may look to take a lien on business assets. The personal credit of the business owners is not factored as heavily as it would be for traditional loans. Many MCA providers will allow credit scores well below 600. However, depending on the provider a personal guarantee may be required from the business owners.
Merchant Cash Advance Rates and Terms
The discount rate or fee charged to the business can vary drastically from provider to provider and greatly exceed the in Annual Percentage Rate (APR) charged for traditional business loans and SBA loans. Providers typically quote the interest rate on a monthly basis which would be between 5% to 17%. This monthly rate is then charged to the amount of funding that is outstanding to the business.
The collection of the funds may vary as well and providers may collect their share on a daily, weekly or monthly basis. There are typically three repayment methods used by advance providers which are outlined as follows:
• Split Withholding is the most common where the credit card company will split the sales between the business and finance company per an agreed portion.
• Lock Box or Trust Bank Account Withholding is where all credit card sales are deposited into a bank account controlled by the MCA provider and then a portion is forwarded on to the business after an agreed amount plus fees go to the provider.
• ACH Withholding is where the finance company receives credit card processing information and deducts its portion directly from the business’s checking account via ACH.
The Advantages of Merchant Cash Advance with SpotOn Financial
The biggest advantage to MCA is the speed at which SpotOn Financial can fund the advance. Many providers market that they can fund within 48 hours, but we set realistic expectations of a week to two weeks before we provide the cash. The speed of the funding can allow a business to react quickly if there is a specific funding need. It may be an equipment purchase, increasing staff, inventory purchase or repairs needed. The underwriting process is expedited because many of the items that traditional banks and lenders review are not required for MCA.
Repeat funding is also prevalent in the MCA world. Once a business repays their advance or if the business can show that they can support an additional advance MCA’s can issue new funds at larger amounts if the businesses sales have increased and can support the additional funds.
Applying for a Merchant Cash Advance
The process of applying for a merchant cash advance is very simple than for most other types of financing. We require a short application as well as submission of (6) months of bank statements and (3) months statements from the credit card processor that the business uses. Simply visit our website at www.spotonfinancial.com and apply online or give us a call at direct: 719.358.5145 toll free: 844.332.5332 or send us an email at email@example.com
*Interest rates and terms will vary based on specific criteria received from the client. This is not a guarantee of a loan and terms are subject to the lender. Loans are void where prohibited by Law. Fees or service charges incurred are not the liability or responsibility of Mr.Checkout.Net. Mr. Checkout.Net does not warrant or guarantee rates, loans, terms, or service to any member. SpotOn Financial is an Equal Opportunity Lender, special terms and rates available to minority and veteran owned businesses.