Business Loans / Merchant Advances
Find Out What Can A Business Loan or Merchant Advance Can Do For Your Business!
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Serving Canada & USA
At Amansad Financial, we have the network that provides non-bank solutions for businesses.
Business Loan or Merchant Advance FAQ:
Answer: Alternative Financing is simply an option for business when a traditional funding isn’t available. Merchant loans and merchant cash advances for business growth when used properly can take a business to the next level.
Answer: These merchant cash advances are not loans—rather, they are a sale of a portion of future credit and/or debit card sales. Therefore, merchant cash advance are not bound by provincial or state laws.
Answer: Almost Any purpose. Examples of ways that business owners have successfully invested their merchant cash advance money include:
- Bridging Capital
- Buying Out a Partner
- Emergency Situations
- Equipment Repair
- Hiring Employees
- Managing Expenses
- Opening a New Location
- Purchase Equipment
- Purchase Inventory
- Store Expansion
- Store Renovations
- Tax Arrears or Payment
- Unexpected Expenses
- Working Capital
Answer: Within 24 – 48 upon receipt of required documentation and signature.
Answer: Credit plays a small role. Decisions are based primarily on business cash flow and no collateral is needed.
Answer: The repayment is automated by either a fixed daily ACH or an agreed upon percentage of your daily or weekly credit card transactions; also referred to as a Holdback or Retrieval Rate.
Answer: Yes. Your current advance will be paid out from the proceeds to consolidate into a single payment. We do have 2nd MCA loan advances available for US based business only.
Answer: Merchant cash advances come with what is called a “factor rate.” Generally, this will be between 1.2 and 1.4. The lower the risk profile, the closer to 1.2 a factor rate will be. The higher the risk, the more likely it is to spiral up toward 1.4.
Well, you multiply your advance amount by that number to see what you’ll be paying back over time. So if you take out a $75,000 merchant cash advance and you have a risk profile that is on the low end, you could get that 1.2 factor rate. So $75,000 X 1.2 = $90,000. That means that you’ll get $75,000 within a few business days, and over the repayment term, you’ll be paying back a total of $90,000.
Answer: The maximum advance is dependent on business cash flow, and location (Canada vs. USA). The minimum advance is $5000, and max advance is up to $2M, and up to $3M on exception. Advance max is dependent on funding partner.
➤ Automotive Merchants
➤ Beauty Shops
➤ Book stores
➤ Car Washes
➤ Clothing Stores
➤ Day Spas
➤ Dental Practices
➤ Fast Food
➤ Florist Shops
➤ Gift Shops
➤ Liquor Stores
➤ Manufacturing Companies
➤ Medical Practices
➤ Veterinary Practices
➤ Hair & Nail Salons
➤ Pet Stores
➤ Retails Businesses/Outlets
➤ Seasonal Businesses
➤ Sporting Goods
➤ Long Distance Trucking Businesses
➤ Hotels & Motels
➤ Dry Cleaning & Laundry Services
➤ Optical Centers, Glasses & Contacts
➤ Day Cares & Nurseries
➤ Loans are unsecured! No collateral required.
➤ The application process is easy
➤ The cash is available quickly
➤ Collection payments are based on your revenue
➤ Pay as you succeed)
➤ High Approval Rates
Benefits of a MCA
Pro: You get your money quickly. Banks make you wait several weeks for approval on a loan. With a merchant cash advance, all the lender has to look at is your bank statements and your credit card income receipts, so you can get approval (and funding) within a few business days.
Pro: Your payments aren’t fixed. You don’t face a monthly minimum payment on this sort of loan. Instead, you pay a percentage of your credit and debit card sales each day. That means that you don’t have a big check to write, whether you have the funds or not. Instead, when you have a strong sales day, you make a larger payment. When you have a slow day, you still get the same percentage of your sales that you would have on the big day.
Advantages of an MCA
Your personal assets don’t go in as collateral. This is an unsecured loan, and if your business goes down the tubes, you won’t be personally liable for the balance due.
You don’t have a set weekly, monthly or quarterly payment. So if you have a down cycle in your business, you pay less back, and you don’t have to pay any fees as a result either.
Fast Funding. Approval takes a business day or two in most cases, and your advance gets funded within a week. You don’t have to send in a ton of documentation, and you don’t have a stack of papers to sign. The provider will check your incoming credit card receipts to ensure that you’ve been getting what you say you have, and you’ll have to give them some bank statements as well to show the financial health of your company.
Bottom line? If you have a strategic plan to put a merchant cash advance to work for you, it can be the boost of cash that could be a huge advantage for your business. After all, if you move into that new space and business doubles, will you really begrudge those payments you had to make? Absolutely not. If you think Merchant Cash might be a big advantage for your own business, give Amansad Financial a call today.
Disadvantages of MCA
Con: Your APR could be high. Once you roll in all the fees and interest, you could be looking at an APR between 30% and 300%, depending on the lender, how much money you are taking out, the amount of time they plan for you to repay, and depending on your own risk factors (amount of time open as a business, for example). Business credit cards (12.9 – 29.9% APR) and online small business loans (7% – 108% APR) are often available for less.
Con: There is rarely no benefit to early prepayment. When you sign the agreement, your repayment amount (which includes interest) is set. This is different from a loan that allows you to pay extra principal with each fixed payment when things are flush.
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