Getting Approved for a Business Cash Advance
Applying for an MCA loan is easy. We’ve streamlined the process to be pain-free and fast. Below are the main qualification factors we look at:
Your lending advisor will ask for recent bank statements to validate income. You will only need to show documents from the last 3 months.
Length of Time in Business:
Being a more established company is considered a good thing to most lenders. As a rule of thumb, the longer you’ve been operating, the better. Approval rates are highest for businesses who have been around at least 6 months.
Leverage is commonly used to assess risk. Understanding how much you owe gives lenders an idea of what you might reasonably be able to afford to pay. If you have a lot of debt, you’re usually considered a riskier applicant than someone who is carrying low to no debt load.
Having high monthly sales is a good thing, when it comes to MCA lending, $10,000 a month in revenue is the benchmark most financiers are looking to see. Bringing in more revenue increases your chances of being approved for a larger advance.
Credit is just one factor amongst many in the approval process. Fortunately, you can be approved for a business advance with bad credit. At Clarify, we look at each client holistically to determine eligibility. We provide funding to applicants with all types of credit.
What is a Merchant Cash Advance?
With a merchant cash advance, you’re able to obtain working capital in exchange for a percentage of your future sales. Merchant cash advances can be a quick, easy way to get funding with no collateral and no personal credit requirements.
Merchant cash advances, also known as credit card processing loans, are designed to meet immediate financing needs, like bridging gaps in cash flow, dealing with unexpected needs for extra funding and taking advantage of new business opportunities.
Rather than pull funds from other parts of your business, a merchant cash advance can cover your costs while keeping your daily accounts payable intact.
Best Cash Advance Funding Alternatives
Whether an advance loan is right for you depends on your unique business goals and preferences. We’ve outlined the most popular business financing solutions below for owners who want to explore other options:
Term loans are a good fit for owners who want predictable and regular payment schedules. You receive a lump sum of money and pay interest on the total amount financed. Unsecured loans do not require collateral.
Commonly referred to as invoice financing, factoring works similar to MCA loans. The key difference here is that the funds you receive are based on account receivables, rather than merchant sales.
Business Line of Credit
Credit lines provide flexibility and maximum control. You only pay interest on the capital you use, rather than the total amount you’re eligible to receive. Owners can draw from an available pool of funds on an as-needed basis, as things come up.
Equipment financing makes sense for business owners who need to buy or rent machinery and equipment. Borrowers with bad credit can be approved. These loans do not require down payments or collateral.