Merchant Advances
TO KEEP OPERATIONS SMOOTH
- UP TO $5,000,000
- 3 MONTH - 2 YEAR TERM
- CREDIT CARD SPLIT REPAYMENT
- AS LOW AS A 1.09 FACTOR RATE
- AS FAST AS 2 DAY
HOW DO THEY WORK?
A merchant advance is a one-time payment made through your processor in exchange for a certain portion of your daily credit card transactions. By selling your receivables at a loss to the funder, you are essentially monetizing them.
WHAT DO THEY COST?
When repaid through credit card purchases, your cash flow may be impacted more than if you had taken out a term loan because merchant advance payments are more frequent, vary based on sales volume, and have a predetermined payback, which restricts your ability to pay them off early. The cost of merchant advances starts at a factor rate of 1.09, and a significant portion of it is determined by the funder's monthly percentage-take on your future receivables.
WHEN WOULD THEY MAKE SENSE?
A merchant advance is a short-term finance option for companies whose credit card sales account for a significant amount of their revenue. A merchant advance changes with your company's daily sales rather than a loan with fixed payments, so you pay more when business is brisk and less when it is slow. Consideration of a merchant advance should take seasonality into account.
WILL I QUALIFY?
Merchant advances could be your best alternative if you have little to no collateral, restricted credit or low credit, etc., or require rapid cash in the next few days. This is because they typically offer easy acceptance criteria. Businesses who process credit cards consistently should be eligible for a merchant advance.