Merchant Cash Advance for Small Business: What to Consider

When considering a merchant cash advance for your small business, think about how soon you need capital and what your credit card sales are, among other things.
January 22, 2018 2 minute read

Merchant-Cash-Advance-for-Smal-Business-What-to-ConsiderFor some small businesses, a loan from a bank can mean the difference between struggling to keep up with the competition, and surpassing them. For others, it could potentially equate to getting behind the eight ball in the future.

Luckily, there are several ways a small business can receive funding, so if one doesn’t seem like the greatest option, there are likely others to consider. As a result, merchants must take the time to evaluate the advantages and disadvantages of each financing method available to make an informed decision, rather than simply choosing the first option encountered.

A merchant cash advance is just one to consider. While some businesses would be better off utilizing another source of funding, many others could benefit from this particular option.

To determine where your business lies, here are three factors to keep in mind:

How Soon You Need Capital

Obviously, the sooner your business has access to working capital, the better, but some companies need money now. This is a key component of a merchant cash advance. Since the application and approval process is pretty quick, merchants could receive capital within just a few days, giving them the opportunity to invest in their businesses that much sooner. This means the money required to buy updated machinery, redesign your workspace, pay off any outstanding debt, and/or invest in new talent isn’t far from your reach.

How Likely You’ll Be Approved For Another Source of Financing

There are some business funding options (and providers, for that matter) that expect more from an applicant than others. Just because a merchant is able to get a loan from a family member, for instance, doesn’t mean a bank is going to feel the same way. While there is documentation most companies will want to review before approving an applicant, some may be interested in learning additional information before they feel comfortable providing a merchant with capital.

When it comes to a merchant cash advance for small businesses, providers tend to approve applicants at a higher rate than business loan providers. This is because they’re not actually lending money to merchants. Instead, they are purchasing a portion of the company’s future credit card sales.

Consequently, business owners who may not qualify for other types of financing, due to debt, for example, may want to consider applying for a merchant cash advance.

What Percentage of Sales Involve Credit Cards

Since a merchant cash advance involves a provider giving a merchant money in exchange for a portion of the company’s future credit card sales, businesses that do not accept card payments would not be eligible. Furthermore, those that primarily receive other forms of payments from their customers may not be the best candidates, either.

On the other hand, if your customers primarily utilize credit or debit cards to make purchases, you may want to find out more about merchant cash advances.

Learn about MPX’s merchant cash advance program.

Topics: Merchant Processing

For additional information please call MerchantPro Express at 888-333-1374 or email

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