Even if your business does normally have a good proportion of its sales come in the form of credit card sales, your company may not be ideal for a merchant cash advance. While some of the requirements of eligibility for a merchant cash advance (MCA) are far less imposing than they might be for a traditional loan, it’s best to be aware of what to expect with an MCA.
Requirements for an MCA
Most alternative lenders expect you to handle at least $2,500 or $5,000 in credit card sales each month, in order to make it worth their while in financing you. If you can demonstrate that you’ve been in business for at least one year, that will probably be acceptable to a lender. There are a couple exclusionary clauses attached with an MCA advance, the first being that you can’t already be working with another lender on an existing MCA agreement, and the second one is that there must not be any current liens against your business property.
Assuming that these conditions are met, you will then only have to provide proof of past monthly credit card sales, so that the lender can confirm your volume of transactions is sufficient to generate repayment money to them. Since the future credit card sales serve as collateral for the advance, there is no need for any other form of collateral, and there are no other real requirements for approval. Some lenders prefer that your business will have been in operation for more than a year, but others may waive that stipulation.
Are you eligible for a merchant cash advance?
If your business routinely consists of a high volume of credit card sales, you may want to explore some options regarding merchant cash advances. Contact us at Acquisition Capital Solution to find out if a merchant cash advance would work for your business, and provide you with upfront cash that you might sorely need.