Merchant Cash Advance | A Complete Guide

A Merchant Cash Advance (MCA) is a lending service which allows merchants access to flexible financing solutions.

In this guide, we will explore the details of MCAs and discover how using these flexible business funding solutions could improve your business.

What is a Merchant Cash Advance?

A Merchant Cash Advance is a financial service which allows businesses to borrow a lump sum from a lender of their choice. Merchants get funded and automatically repay with a fixed percentage of their daily sales. Lenders offering access to working capital gives small businesses the chance to use funding to grow and develop their businesses.

How does a Merchant Cash Advance work?

An MCA works by a merchant providing their chosen lender with some basic company information. This allows the lender to verify the merchant. The lender will review the information and offer the merchant lending options based on their transaction history. Once an offer is accepted, funds can be transferred to the merchant on the same day.

As a part of the advance, the merchant will agree to a repayment structure in which the merchant will have to repay a fixed fee for funding automatically as a percentage of daily sales over a specified period of time.

Other names for Merchant Cash Advance

Merchant Cash Advances are also known as invoice financing, cash flow finance, flexible financing, and business cash advances.

What are the benefits of an MCA?

Quick Access to Capital

Typically, MCAs have a fast approval and funding process, providing businesses with quick access to the funds they need.

Use for Various Business Purposes

Businesses can use MCA funds for various purposes, such as marketing spend, working capital, inventory management or any other business-related expense.

Simple Application Process

The application process for an MCA is generally less complex than traditional loans, requiring minimal documentation.

Choosing the Right Provider

There are lots of lending providers available online so it is easy for merchants to find lots of suggestions for an MCA provider to best suit their business needs. Merchants must do their research into the lenders available to find out whether a business cash advance is right for their business.

Income Group have partnered with business cash advance provider YouLend. Their funding and repayments are proportional to your customers’ sales to support their working capital needs. YouLend provides a straightforward application process and industry-leading APIs enable >90% approval rate with same-day offers and funding in as little as 24 hours. Multiple capital sources enable YouLend to offer competitive pricing and to get the best deal for your business customers.

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