Written By: Temitope Ajadi
A guide to applying for a merchant cash advance
If you are a business owner looking to take out a loan, it can be easy to find lenders willing to provide you with the funds you require.
However, there is another way to finance your startup – merchant cash advances. The article provides an overview of what a merchant cash advance is, including the pros and cons of the loan, as well as 5 steps for applying for one.
What are merchant cash advances?
A merchant cash advance is a form of company finance that allows firms to flexibly get the cash they need. The lender gives the company a cash advance, which it repays by taking a percentage of its customers’ card payments using a card terminal.
To get a merchant cash advance, you need to have a strong credit history and a healthy business. You also need to be able to show that you can repay the loan early. Below are the five steps to meet the requirement and successfully secure a merchant cash advance.
Research Cash Advance Providers
There is so much to choose from when it comes to merchant cash advance providers. It is hard to know where to start. Luckily, there are a few steps that you can take to narrow down your choices and find a provider that meets your needs.
Work with an Approved Credit Card Processor
The second step is to work with a credit card processor that has a merchant cash advance program. A credit card processor can be a bank, an online payment company, or a third-party service provider.
The program is designed for businesses with a good track record of paying their monthly bills on time and going above and beyond to provide good customer service.
Contact multiple cash advance providers. It is important to decide which company you will work with before you take the banking plunge.
Submit an Application
Now is the time to apply. You will need to create a credit report and pay your application fee. Applications typically take three to seven days to process, but they usually happen much quicker. If the application is approved, you can move on to the next step: getting pre-approved for a loan and reviewing the prospective contract.
This application will take about 15 minutes to complete, including the time needed to go through all of the required information that will be requested from you.
Review the Prospective Contract
The first step is to review the contract and determine if it meets your needs. In addition, the merchant cash advance company will provide a list of their current merchants that use their services.
Once you have determined that the company will be a good fit for you, you should evaluate what credit qualifications you need to be approved for a merchant cash advance.
Preparing Your MCA Application Will Help Increase Your Chances of Qualifying
When you’re ready to start looking for a Merchant Cash Advance, keep these tips in mind. My advice would be to plan and prepare the application early on and calculate how much it will cost your business.
For example, don’t just upload your application and complete one section per day – do it all at once so that you can get a good idea of what it’s going to be like and what parts may need some tweaking.
Also, make sure to read the entire agreement closely. You don’t want to fall into a trap by agreeing to something you didn’t understand. Finally, be sure to have a plan in place before you apply in case it doesn’t work out.