What is a Merchant Cash Advance?
MCAs, also known as a Purchase of Future Sales Agreement, operate very similarly to Business Cash Advance, but the most significant difference is the repayment process, which is connected to the future credit card sales instead of overall sales. A merchant cash advance can be perfectfor you if your business receives significant monthly charge card sales revenue. A merchant cash cost charged is not an interest rate, but a factor rate. Advance is not available to businesses that don’t have a merchant account and don’t accept business credit card sales from customers regularly. These cash advances take a set percentage of daily credit card sales and are taken at the time of batch until the advance is paid back in full. Business owners find this valuable when they have to fluctuate monthly charge card revenues and don’t want to be locked into a fixed payment that could negatively impact cash flow or margins of profit if revenues decline or fluctuate. Reminder, advance a merchant cash advance isn’t categorized with business loans, LOC, or a paycheck protection program, but an advance made by selling a portion of the company’s charge card sales at a discount to a funder in exchange for money now. This product is not a business loan or LOC.
To learn more about your merchant cash advance options for your business, get in touch with the business lending experts at FOCUS Lending.
