A merchant cash advance is a financing option for small and mid-sized businesses in need of working capital. Merchant cash advances are not loans. Unlike a bank loan, merchant cash advances typically require no personal guarantee, no liens or collateral, have no fixed payment schedule, have no absolute obligation to repay (the buyer assumes the risk of business closure), and no business-use restrictions. The merchant cash advance provider purchases a specific amount of future receivables from the business at a discount and receives a small percentage of the owner’s daily future credit, debit card or cash and check deposit receivables. Each time a sale transaction is made, a percentage of the receivables are forwarded to the cash advance provider or purchaser until all of the purchased receivables are forwarded to advance provider. Repayment follows the owner’s revenue trend, and is directly related to the success of the owner’s business.
Small and mid-sized businesses obtain merchant cash advances for many business reasons. Some of the most popular uses have been for purchases of new equipment, inventory or seasonal merchandise, expansion or remodeling, payoff of debt or taxes, and emergency funding Everything you need to know about merchant cash advance funding from Integrity Corporate Funding. If you have additional questions, please contact one of our experts for more details.