The article will cover the main peculiarities of merchant cash advance and its value in small businesses and startups.
General features of MCA and credit cards
MCA is a merchant cash advance that is considered to be an alternative source of funding. It is much different from traditional banking operations. A chosen financial provider applies financials for entrepreneurs, so they will repay with the sales instant percentage in a suggested period. If you just need funding immediately, this option will accomplish your business goals.
Advantages of MCA
- Quick funding possibilities for each client
- Flexible conditions and terms for repayment
- Providing an opportunity to select the purpose of using the funds
- No endorsement is required.
Disadvantages of MCA
- High pricing is required (up to 200% APR)
- Need to be accepted for credit cards
- It isn’t interested in creating business credit
- Special instant daily payments required.
How do credit cards run the money issues?
- A credit card is managed by a financial company and allows you to borrow a special sum of money up to a required limit suggested by the company rules.
- When you pay down the sum that you have borrowed lately, you can easily borrow one more time up to a special credit limit.
- To avoid charges, you have to pay on a due day.
Some MCA companies provide you with funding for small businesses under different conditions. Each company has its own peculiarities and standards of financial operations which are not equal at marketing.
- National Funding requires few criteria for approval of selected paying strategy.
- It is suggested that Can Capital is the right financial solution for the enterprises with personal credit profiles. Mind, their repayment process requires short terms which can be less attractive.
- The brilliant option for startups is Credibly with its positive service of receiving funding in two business days. The fee is organized with an average paying 2.5%.
- The next popular option is Fora financial which requires only 6 months of business. The preferable process raises to $500000.
- If your business affairs appeal to a bad credit history profile, Fundbox lines of credit will cover the process effectively.
Getting the approval for MCA
The perfect ideas for using MCA options are:
- Temporary financial flow help
- Working capital issues
- Paying debts in time
Qualifying for MCA seems to be the simplest process. A key benefit of MCA is to provide a short-term opportunity for purchasing the business goals. You can also view some alternative solutions for your bad credit profile:
- Specific small business loan (it seems to be the brilliant option covering small business needs)
- Factoring process (it is allowing you to take the suggested cash now)
- Special AR financing (it means that a lending company will respond your payment straightforwardly to the credit office)