MCA Business Loans

New business owners who are in need of funds might be thinking about a couple of options for them to acquire or get the financing they’re looking to get. They could be thinking of:

• Bank Loans
• Credit Union Loans
• SBA Loans
• Investors
• Lending Companies

These are the most usual and typically, the regular options that business owners take whenever they need funds. The reason for them needing the funds could be anywhere from starting a business, funding the business, paying company bills, and even expanding the business.

But are these the only options business owners can take for them to get funds? Fortunately, no, these aren’t the only sources of funds that business owners can take advantage of. In fact, there are a lot of alternatives of taking on and applying for loans.

One of which is through a Merchant Cash Advance (MCA). We will be discussing what an MCA is and what MCA business loans are, too!

What is a Merchant Cash Advance?

In its simplest terms, a merchant cash advance is a type of funding technique that can be used by a business to get a lump sum amount of money in exchange for future recurring sales. This type of cash advance is best for businesses in the retail industry or those who sell products and services.

A few important factors about an MCA include:

• The repayment of an MCA would usually be a daily, weekly, or even a monthly payment
• There are a lot of providers and you can find them online
• Repayment is not through interest rates but factor rates

If a business requires funds, then that specific business can apply for MCA business loans and get the funds they need to suffice the financial needs of the business.

Requirements for MCA Business Loans

An MCA business loan is a good alternative to loans and loaning programs that have strict requirement and credit score assessments as well as certain processes that take months for it to get approved. The usual requirements for a business loan through an MCA would be:

• Bank Statements
• Credit Card Statements
• Credit Score and History
• Business Tax Returns
• Proof of Identity
• Proof of Business

When an MCA Business Loan is Not For You

An MCA loan is perfect for businesses in the retail industry especially if they’re looking to expand e.g. establish another store or office, etc. The downside of an MCA is the fact that the factor rates might be higher than what most business owners expect.

Although the usual factor rates would be just in the ranges of 1.1 to 1.5 percent, it’s a big thing if you look at it. For instance, borrowing $25,000 at a 1.25 factor rate would mean that you have to pay them back $31,250; whereas the $25K is the principal amount you loaned and the $6,250 is the factor rate.

It’s costly, and it’s only effective if you are in dire and in an urgent need to finance your business. But if we were to talk about the application process and the requirements, it’s lenient.

You might think of MCA business loans as a joke because of its ridiculously and unorthodoxly high interest rates. So if you need a business loan, you can absolutely apply for our business loan here at SoFlo Funding.

The loans that we offer our business-owner clients are lenient and the rates are not that high. Even if it’s an unsecured loan, we beat other companies and other industries in the rates of the loans that they apply for.