Whether you need money for new equipment or to bulk up your inventory, the old saying “you have to spend money to make money” applies. For businesses looking for capital, there are many options, ranging from traditional small business loans to increasingly popular merchant cash advances.
What is a merchant cash advance?
A merchant cash advance is a form of funding where a credit card processor or third-party lender “advances” you money based on your credit card sales volume.
Essentially, the lending company is purchasing a portion of your future credit card sales. Instead of a traditional loan with a monthly payment, you’ll repay the advance through an automatic deduction from your daily credit card sales.
Notably, you don’t necessarily need good credit. One of the primary factors in determining whether you’ll be approved for an advance is strong credit card sales. If you can show that your business processes a lot of transactions by card, you’ll have a better chance at a successful application.
Specifics vary by lender, but in general, you may qualify if:
- You’ve been in business for at least one year
- You currently accept credit cards and process at least a few thousand payday loan places in London Ohio dollars per month
- You’re seeking at least $10,000 in funds
Some cash advance companies may have additional requirements, including a minimum threshold for credit card sales per month, but these criteria give you a starting point for understanding your likelihood of getting an advance.