Merchant cash advances are a short-term lump sum infusion of cash based on your business’s credit and debit card deposits.
The cash advance is repaid through an automatic deduction of a fixed percentage of your credit card deposits. Since your deposits can vary, your repayment period will fluctuate accordingly. The factor rate and total fees are determined at the time your advance contract is signed and are fixed costs no matter the speed you repay.
Though merchant cash advances typically come with high fees and interest rates, easy approval and fast funding make them an attractive solution for many businesses that find themselves in a temporary financial tight spot.
For some businesses, the high repayment fees can cause them to default or require refinancing. For this reason, merchant cash advances should only be used as a short-term financing solution.
If you accept a merchant cash advance, be careful not to stack merchant cash advances. It can lead to a debt spiral and make repayment not affordable.
* If you meet these general loan guidelines, you will most likely receive loan offers for this funding product. Loan offers are preliminary based on the information evaluated, final funding amount offer may be adjusted during final underwriting.
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