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Factoring FAQ



What is “Cash Advance” for Business?


A cash advance is an unsecured loan that is based on the future credit card sales of a business.  This is an excellent solution for many small businesses that are in need of capital, but may not have the time or resources to get a traditional bank or lending institution loan. 


This is an unsecured loan based on recent months, usually the last 4-6 months, of credit sales.  The lender does not require tax returns or business plans.  It is solely based on the history of your credit card sales.  This is important for relatively new businesses that r may not have perfect credit or may not want to take the time to provide a bank with all of the necessary information. 


There are no set monthly payments with a cash advance.  Instead the loan is repaid directly from your merchant account by taking a percentage of every sale.  It usually takes six to eight months for the business to repay the loan.  This is advantageous for a business trying to control cash flow.  If it is a slow month, maybe because of seasonal sales, then you will pay less on the loan.  On the contrary, if you have high a great month with high sales you will be paying more on the loan. 


There are a few requirements for businesses trying to get a merchant cash advance.  Usually the lender will require that you have been in business for a little while, a year is a general rule, but less is sometimes possible.  Your business must accept credit cards, Visa and Mastercard, and will need to have monthly sales of around $2500 or more. 


There are many options for businesses seeking to obtain capital, but few are as quick and easy as a merchant cash advance.  With the tightening of the lending market, it can be hard for small businesses, especially newer ones, to qualify for a loan.   A merchant cash advance may be the perfect solution to get the cash moving and keep your business growing.    




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