You’re off to a great start — running and growing a business in Pennsylvania. Now, you just need access to capital. A merchant cash advance (MCA) can be a quick and easy financing option. You’re not restricted on how to use the funds, and an MCA often comes with flexible repayment terms.
Keep reading to discover what a merchant cash advance is, when to use it, and how to secure one in Pennsylvania.
What Is a Merchant Cash Advance?
A merchant cash advance (MCA) provides business owners with a fast and easy alternative to business loans that doesn’t need to be secured with collateral. The amount just depends on the past and projected future credit card sales of the company. It’s called a merchant cash advance because borrowers receive cash upfront that they’ll pay back with a percentage of their sales.
A portion of your sales goes toward paying the loan amount plus the factor rate. Most lenders offer a flexible repayment period that ranges from three to 18 months.
Unlike a term loan, where you have to make monthly payments, you don’t have to worry about missing payments in a business cash advance agreement. The lender will take out payments automatically on a daily or weekly basis from your merchant account.
It’s a form of business financing geared toward small businesses and startups that can’t qualify for traditional loans like business lines of credit to get funding.
How Much Can You Get With a Merchant Cash Advance?
Like other small business loans, the amount you can borrow depends on the lender’s criteria. But you’ll find that most MCA loans range between $5,000 and $500,000.
Note that merchant cash advance companies base how much you can borrow from your past and future credit card transactions.
When Does It Make Sense To Get a Merchant Cash Advance?
An MCA may make sense for small business owners looking for fast and easy funding. It’s not difficult to qualify because merchant cash advance providers don’t require collateral or excellent personal or business credit scores.
The application process tends to be quick and only comes with minimal paperwork — not like the complicated and long process of traditional loans.
Borrowers can get approved on the same day and receive cash within a few days. That’s why it’s a good loan option for business owners who needed money yesterday to cover working capital, such as buying inventory or paying for rent and payroll.
Merchant cash advances also offer flexible repayment terms, which can be beneficial for seasonal businesses that can’t afford to pay back loans with fixed payments every month.
What Are the Requirements To Get a Merchant Cash Advance in Pennsylvania?
Some key information lenders may require when applying for a merchant cash advance include:
- Time in business. Your business must have been operational for at least six months to qualify for business funding with a merchant cash advance provider. Lenders use your time in business to assess how risky you are as a borrower. The more established your business is, the lower the risk.
- Business income. When you apply for a merchant cash advance with Clarify Capital, we recommend that your business generate at least $10,000 in monthly revenue. Loan providers want to ensure you have the cash flow to repay your loan. It also helps them calculate how much you can borrow.
- Credit history. Excellent credit scores aren’t needed to qualify for a merchant cash advance. But we still recommend that your credit score be at least 550. If you have poor or bad credit, call Clarify directly to explore your options.
- Debt-to-income (DTI) ratio. Some lenders may choose to look at your DTI ratio. It measures your total debt against your overall income, helping merchant cash advance companies calculate the loan amount you can pay without difficulty.
How To Get a Merchant Cash Advance in Pennsylvania
Whether your business is located in Philadelphia, Pittsburgh, or Allentown, your application for a merchant cash advance can be quick and easy with these steps:
1. Gather the Business Info You Need To Apply
Make sure you have all the required documents and business information handy. Lenders typically ask for the following:
- Legal identification documents, such as your driver’s license, passport, employer identification number (EIN), and Social Security number (SSN)
- Business documents, such as any business permits and licenses, Articles of Organization, or Articles of Incorporation
- Personal and business tax returns
- Financial statements, such as balance sheets, profit and loss (P&L) statements, or cash flow statements
- Credit card processing account statements (at least three months)
2. Find the Best Merchant Cash Advance Lender for You
When it comes to merchant cash advances, look for lenders with a streamlined application process and clear terms. Make sure you know how they calculate interest rates and fees before you sign the contract. Furthermore, ensure you understand your payment schedule and that there are no hidden fees.
3. Apply for a Merchant Cash Advance
So, you’ve prepared all the necessary information and asked your lender all the right questions. You’re now ready to apply and hit the send button.
With Clarify Capital, applying is easy — take just two minutes to fill out our online application, and we’ll help you find the lowest interest rate available.
4. Secure the Cash Advance Funding You Need
True to its form, a merchant cash advance is a quick and easy funding solution. Expect to receive your loan amount in your bank account within a day or two after you’ve received confirmation for approval.
With Clarify Capital, you can receive funding in as little as 24 hours.
Get a Merchant Cash Advance Now With Clarify Capital
If you’re looking for a partner you can trust, work with Clarify Capital. You’ll have access to more than 75 lenders to ensure you get the best rate.
We also strive to keep things simple and transparent. No vague terms and contracts because you’re matched with a Clarify adviser guiding you throughout the process. Apply for a merchant cash advance today.