Merchant Cash Advance Loan

Funding a business or a small business has never been easy, in fact, it’s considered as one of the most difficult and the most challenging parts of owning a business. And looking for and acquiring funds doesn’t always have to be you applying for a bank loan, or it’s not always going to require you to ask help from friends and family.

There’s always an alternative on how you can gain or acquire the funds you need – one of which is through a merchant cash advance loan. A merchant cash advance loan is a type of funding that business owners can get in which they’ll be able to get and acquire the funds faster than how banks, credit unions, and the SBA does.

How a Merchant Cash Advance Works

The process on how a merchant cash advance or an MCA works is fairly simple – it’s just like applying for a loan. It starts with a borrower requiring funds to be used for his or her business, this amount could be anywhere from a few thousand dollars to above $100K.

Then, the borrower would approach a merchant cash advance loan provider or company that is willing to give the chance. The lender will then evaluate and assess the documents of the borrower and if it’s good, they’ll set up the repayment. The factor rate is the amount that’ll be added to the payment installments, not the interest rates.

Usually, the factor rates would just play around 1.1 to 1.5 points (11% to 15%) – it’s rarely higher or lower than that.

A merchant cash advance loan is similar to how bank loans work, the differences are within the loaning amount, the rates, and even the repayment method.

Is a Merchant Cash Advance Loan for You?

How do you know if getting a merchant cash advance loan is the most sensible thing to do in your situation? How does it become better and more advantageous than regular bank loans? The answers lie in these factors:

• MCA Loans release funds faster – usually within 2 to 3 weeks. Banks release funds within 3 to 4 months.
• The rates are technically higher than what banks offer. Banks have a 6% interest on loans, whereas an MCA loan would have 11 to 15%.
• Monthly payments or installments are done if a bank loan is acquired. Payments for an MCA loan could either be daily or weekly – it can be monthly, too depending on the agreement.

In all fairness, merchant cash advance loans are beneficial especially if a business needs urgent funds. However, the downside is with the high rates in terms of repayment. So technically, it’s going to be up to you if a merchant cash advance loan is for you or not.

Other Alternatives

Many business owners find merchant cash advance loans better than any other type of loans – why? Because it provides faster fund release and the term is short. They wouldn’t be thinking about it for a long time. The challenge is with the interest rates.

So are there alternatives to a merchant cash advance loan? Fortunately, there are! There are business funding and lending companies that offer businesses a chance to get and acquire funding fast without being tugged and sliced off by interest rates.

We here at SoFlo Funding can help you with a loan that you’re looking to get. We’re better than banks because we can provide the funds to you fast – usually in 14 to 21 days; we’re better than merchant cash advance loans because our rates don’t go high as 15% usually! In fact, we have programs where we ask for 0% interest on the first few months!