How are Business Cash Advances different than Bank Loans, SBA Loans or Working Capital Lines of Credit?
A merchant cash advance is a sale of your future credit card receivables at a discount. Following are some key differences between merchant cash advances and bank loans and lines of credit: • There is no “Interest Rate;” instead you agree to payback a predetermined amount of the advance purchase price. • Unlike a small business loan, there is no “Term”. Instead you agree to pay daily a percentage of your daily credit card batch settlement(s). The payback time varies with how much or how little credit card processing volume your business processes during the settlement period. • There is no collateral or other security. • Merchants with credit challenges can almost always get approval for a merchant cash advance. • There are no personal guarantees business cash advances are unsecured cash funding instruments. • There are no restrictions on the uses for your merchant cash funding. • No late payment fees you pay your merchant cash advance automatically when your customers pay you.
Related Questions
- Can my business qualify, if I already have existing credit lines, SBA loans, owe back taxes, or have already filed bankruptcy?
- Can my business qualify if we already have existing credit lines, SBA loans or are a debtor in possession (Chapter 11)?
- What are SBA loans and how are they different from conventional business loans?
