• ACR Funding

What Is a Merchant Cash Advance? – Is It Right For Your Business?

Wondering what options you have for alternative business funding? A Merchant Cash Advance (MCA) may be right for you. In this article, we’ll help you to understand if it fits your needs.


What is a Merchant Cash Advance?


A Merchant Cash Advance is not a true “loan" but rather an advance on the future revenue generated by your business. Essentially, it is “secured” by your future sales. This means you can easily qualify for this type of funding even if your business has struggled in the past, or if you have bad credit.


How Does a Merchant Cash Advance Work?


The provider of the MCA gives you a lump sum, which you can use however you need for your business. In return, they purchase a percentage of your future sales which is paid via a split on your credit card sales or as a regular ACH debit from your business bank account. The credit card split percentage is sent directly to the merchant cash advance company through your processor each time you batch out your sales. ACH debits are withdrawn only on Monday through Friday.


As you sell more products or services, the credit card split or daily ACH debits will continue until the cash advance has been repaid in full. It’s really that simple. All you need to get started are your last 3 months of bank statements and credit card processing statements. The merchant cash advance company will use that information to determine how much money you can receive as an advance. If you don’t accept credit card payments, don’t worry. Your merchant cash advance will be calculated based on your bank statements only, and your repayment will be via ACH debit.


What Are the Benefits of a Merchant Cash Advance?


  • Easy to qualify – As long as you’ve been in business for at least 6 months and your sales have been consistent, you can qualify for an MCA even if you have bad credit or have been through bankruptcy. In fact, ACR Funding can qualify you even if you’re currently in an open bankruptcy.


  • No fixed monthly repayment – Your payment is based on a percentage of your sales. If sales slowdown, your payments can be adjusted. This translates to merchant cash advances being ideal for businesses with strong seasonal revenues – such as retail stores and restaurants.


  • Ideal for funding expansions or upgrades – If you want to expand your business or upgrade your store, a merchant cash advance can be a great way to get funding. And, as your sales grow with your expansion, you’ll be able to pay off your MCA more quickly.


Is a Merchant Cash Advance Right For Me?


MCAs are usually more expensive than comparable small business loans, so you should be confident that you can afford the higher cost of working capital associated with them. However, if your business needs immediate capital, and you cannot qualify for a traditional loan, or you want an advance with an income-based repayment scheme, MCAs may be the right choice. You can be approved and funded for an MCA in as little as 24 hours versus a traditional bank loan which can take weeks or even months. MCAs have shorter terms than traditional bank loans which can be good if your sales are consistent and the daily ACH payment or credit card split percentage still allows you to meet all your financial obligations.


ACR Funding is the Right Choice for Your MCA Needs!


If you need a reputable provider of merchant cash advances, ACR Funding is the perfect choice and is here to help. If you still have questions, please visit our FAQs and requirements pages, or contact us to talk to one of our funding specialists. Get the funding you need to grow your business now. Our representatives are waiting to assist you.