Merchant Cash Advance

What is a merchant cash advance?

Occasionally referred to as an MCA, a merchant cash advance is defined as a short-term funding solution designed for firms that accept credit and debit card payments. It is considered as an alternative form of financing to more traditional financial products like unsecured business loans.

If you trade through online sales or take card payments, a merchant cash advance (MCA) is one of the quickest and easiest ways to access capital for your business without having to worry about fixed terms or repayment schedules. Your business will be able to continue trading, just paying back a percentage of the loan every time a card payment or online sale is made.

Through an MCA, some lenders supply businesses with a sum of money upfront. The businesses then repay the funds advanced with a percentage of its sales from card transactions, plus additional fees.

Unlike other types of business loan, providing they are eligible, firms can obtain an MCA without offering up assets like inventory or property as security to access the funding they need.

How does a merchant cash advance work?

Typically, the MCA process starts with an enterprise applying and providing card sales history for the lender to assess. Based on the frequency and volume of card transactions, the lender analyses the firm’s ability to make repayments. Once approved, the lender provides the business with a lump sum of cash.

The repayment procedure involves the MCA provider automatically deducting an agreed-on percentage of the firms’ card sales each month, week or day until the cash advance and its associated fees are completely repaid. As a result, the company only makes repayments when its customers pay. The more credit and debit card payments that customers make for their purchases, the faster that the advance is paid back.

Unlike other forms of business finance, MCAs don’t include standard repayment terms like fixed interest rates or regular monthly payments set up as standing orders.

Benefits of a merchant cash advance

There are several business benefits to an MCA. They offer faster access to required funding than traditional finance options, have no fixed payments and typically don’t require hard credit checks or collateral.

Am I eligible for a merchant cash advance?

At AJL Finance, we specialise in providing personalised finance solutions like SME business loans, MCAs and other products. If you are unsure if you can access a merchant cash advance, just take a look at our easy-to-use online eligibility checker below, and we can supply you with an offer decision within 48 hours. If you are eligible for an MCA. you can expect the funds you need for your business within the same time frame.

To build your cash flow, we at AJL Finance are here to help. Contact us today to get started and see how an MCA can help your business grow.