Updated: January 17, 2024
Established merchant services offer Merchant Cash Advance loans on top of payment processing. You can use this advance to purchase inventory, expand your business, or settle unexpected expenses.
If this is your time hearing of an MCA loan, US Card Solutions will explain it in detail today. Get the information you need to take advantage of this quick advance from your payment processor.
What is a Merchant Cash Advance (MCA)?
What is an MCA loan? An MCA loan is a financing plan whereby a merchant service advances you an upfront lump sum in exchange for future sales. Afterward, you pay back the advance using a percentage of your future credit and debit card sales. Businesses qualify for advances such as this if they have a strong credit and debit card sales history.
How do MCA Loans Work?
An MCA is different from a conventional loan. It is a financing solution whereby your merchant service purchases future credit and debit sales. The lender, in this case, your merchant service provider, would recover the advance plus interest from future sales.
Unlike traditional loans, an MCA loan has no fixed repayment period. Your merchant service provider will negotiate a predetermined percentage amount of your sales to deduct until said advance has been recovered. On average, the repayment period can range from 3 to 18 months.
Some merchant service providers use a different strategy to recover their MCA loans. They deduct fixed daily or weekly amounts from your business account. With fixed deductions, you get a more predictable repayment structure.
Benefits of Using an MCA Loan
US Card Solutions can process MCAs within 24 hours as a merchant service provider. As such, this financing is an excellent solution for quick finances to settle time-sensitive bills like legal fees and utilities.
Beyond the quick processing times, an MCA loan provides many benefits. These include:
- No collateral is required. Collateral is typically not needed to apply for an MCA loan. Merchant service providers like US Card Solutions can use your business’s credit and debit sales history to assess your repayability. Not surprisingly, this advance is great for companies that need more collateral for regular loans.
- Qualifications are different from a conventional loan. Your credit score does not play a pivotal role in determining eligibility for an MCA loan. Instead, merchant service providers rely on your business’s credit card and debit sales to gauge your ability to repay. If your credit score bars your business from receiving a traditional loan, an MCA loan could be a far better alternative option.
- Flexibility of Repayments. As repayment is dependent upon a fixed percentage of sales, this allows your business more flexibility after the loan has been accepted. Day-to-day processes wouldn’t need to be compromised, whereas they’d usually be with a conventional loan, allowing your business to stay afloat even if times are slower than usual.
- Application is easy. Applying for an MCA loan is straightforward. You’ll typically need to provide recent credit and debit sales statements and basic company information. You can make the application online, saving you more time.
See our Options for MCA Loans
Our company, US Card Solutions, is a trusted partner in payment processing. We help businesses handle transactions for all major credit and debit cards. Our rates are fixed, and we do not coerce you into contracts. Our top-tier merchant services will give you a reason to keep using our services as we offer month-to-month plans. We will work directly with your business if an MCA loan is needed, ensuring you have upfront and transparent pricing.
Contact us at (844) 931-1923 to learn how you can take advantage of our MCA loan.
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