Ever wonder how some small businesses seem to scale so quickly? Often it’s thanks to an influx of capital to fund their growth. If you’ve been looking for ways to finance the expansion of your own company, you may have come across the term “merchant cash advance.” This alternative funding method has become popular for many small business owners.
A merchant cash advance, or MCA for short, provides you with a lump sum of capital in exchange for a percentage of your future credit card sales. The advantage is you get funding fast without having to qualify based on your personal credit score or provide collateral. The downside is the overall cost can be higher than a traditional business loan. However, for many business owners the speed and flexibility outweigh the higher fees.
If you’ve been hesitant to apply for a bank loan or don’t want to give up equity in your company to investors, a merchant cash advance could be an option worth considering. In this article we’ll walk you through exactly what an MCA is, how it works, the pros and cons, and how to determine if it’s the right choice to fund your company’s next growth phase.
What Is Merchant Cash Advance Blursoft?
A merchant cash advance, or MCA, is a form of small business financing where a company sells a portion of its future credit card and debit card receivables in exchange for an upfront lump sum payment. The upfront payment amount depends on your monthly credit card sales and the percentage of future sales you’re selling, typically 10-30%.
MCAs are a quick and convenient financing option for businesses with lots of credit card sales that need access to working capital fast. The application process is simple, funding can happen in as little as 2 days, and there are minimal restrictions on how you can spend the money.
However, MCAs also tend to be expensive. The upfront payment amount you receive is less than the total amount you’ll repay over the life of the agreement. For example, you might receive a $20,000 upfront payment in exchange for paying back $28,000 over 9 months by giving up 10% of your monthly credit card sales. The actual terms and repayment amounts will vary for each business depending on your credit and financials.
While MCAs have a place as a short-term financing solution, they should really only be used when other, less-expensive options are unavailable. The bottom line is that MCAs can be easy to qualify for but often come with a high cost of capital. As with any financial product, make sure you understand all terms and fees before signing an agreement. With the right expectations going in, an MCA may be able to provide your business the quick funding it needs.
How Does Merchant Cash Advance Blursoft Work?
So how exactly does merchant cash advance work? Basically, it’s a form of small business financing where a lender advances you money in exchange for a percentage of your future credit card sales.
How It Works
The lender will evaluate your business’ credit card volume and processing statements to determine how much they’re willing to advance you, usually a percentage of your annual sales. (1) They’ll deduct a fixed amount from your credit card sales each day to pay back the advance plus their fee. (2) This continues until the advance amount has been repaid, typically 3 to 18 months.
The biggest benefit is it’s easy to qualify for since it’s not actually a loan. The lender is taking on the risk, hoping your sales will be strong enough to recoup the advance quickly. The downside is the total payback amount can be higher than a traditional bank loan due to fees. However, for many small businesses it’s a simple, fast solution when money is needed.
What to Consider
Make sure you understand the payback terms fully before signing an agreement. Compare offers from different lenders to get the best deal. Negotiate the best split rate you can – the percentage they take from each sale. A lower rate means paying the advance back faster and lower total fees.
Also, check that the lender’s take is capped at a maximum amount so you’re not paying exorbitant fees if it takes longer to pay off. Know your average credit card volume and processing fees to determine if the lender’s proposed split rate is reasonable. With some due diligence, merchant cash advance can be a viable option for financing your small business.
Benefits of Using Merchant Cash Advance Blursoft
Benefits of Using Merchant Cash Advance Blursoft
A merchant cash advance (MCA) from Blursoft offers several advantages over a traditional business loan.
- Quick funding. The application process is fast and funding usually takes around 2 to 7 business days. This speedy access to capital can help you take advantage of opportunities or solve urgent issues.
- Easy approval. MCAs are easy to qualify for as they are not actually loans. Blursoft evaluates your business’ credit card sales to determine how much they will advance you. As long as you have been processing a minimum monthly credit card volume for at least 4 months, you have a good chance of being approved.
- No fixed payments. Rather than fixed monthly payments like a loan, you repay an MCA by allowing Blursoft to withdraw a percentage of your daily credit card sales until you have repaid the amount advanced plus a factor fee. So, your payments flex up and down with your sales. This can help when business is slow.
- No collateral required. Unlike a business loan, an MCA does not require any collateral or personal guarantees. Your future credit card receivables secure the advance.
- Use funds as needed. You have flexibility in how you use MCA funds for your business. Use them for inventory, marketing, expansion, payroll, or any other expense. There are no restrictions as long as it is for a legitimate business purpose.
While an MCA may have a higher overall cost of capital compared to a bank loan, it provides fast, easy funding without restrictions on how you spend it or a fixed repayment schedule. For many small businesses, the pros outweigh the cons. Blursoft aims to provide fair terms and the best customer experience possible.
Merchant Cash Advance Blursoft vs Traditional Business Loans
Merchant cash advance (MCA) is a popular alternative to traditional small business loans. With an MCA, you get funding quickly by using your future credit card sales as collateral. MCA providers, like Blursoft, offer some key benefits over bank loans:
MCA funding only takes a few days to secure, compared to weeks or months for a traditional loan. Blursoft can approve your application in as little as 24 hours and provide funding in 3-5 business days. This speedy process lets you take advantage of opportunities or deal with cash flow issues immediately.
MCAs have lenient qualification criteria. Blursoft looks at your monthly credit card volume and processing history rather than your personal credit score or financials. As long as you’ve been in business for at least 6-12 months and process a minimum monthly volume, you’ll likely qualify. This makes MCAs ideal for startups, businesses with poor credit, or those in need of quick capital.
With an MCA, you repay the funding through a fixed percentage of your future credit card sales, called a “holdback percentage”. Blursoft will deduct a predetermined amount from your daily credit card batches to repay the funding. This means higher sales days will repay the MCA faster, while slower days will repay less. There are no fixed monthly payments, penalties for early repayment, or balloon payments at the end.
MCAs are non-recourse, meaning the funding is secured only by your credit card receivables. Blursoft cannot seize your business or personal assets if you default. The only penalty is a higher holdback percentage. While an MCA may be more expensive than a bank loan overall, this non-recourse feature provides an extra level of security for business owners.
In summary, an MCA through Blursoft provides fast, easy funding for small businesses with flexible repayment terms and non-recourse security. For many companies, an MCA is a convenient alternative to get quick capital compared to a traditional bank loan.
How to Apply for Merchant Cash Advance Blursoft
So you’ve decided that a merchant cash advance is right for your business. Great! The application process is typically pretty straightforward. Here are the main steps to apply for merchant cash advance funding through Blursoft:
Gather Your Business Documents
You’ll need to provide some standard business documents like your business bank statements from the last 3-6 months, processing statements showing your credit and debit card transactions, business tax returns, and financial projections. These give the lender insight into your cash flow and ability to repay the advance.
Check Your Eligibility
Not all businesses will qualify for a merchant cash advance. Blursoft will evaluate factors like your time in business, monthly revenue, and credit card processing volume to determine if you meet their eligibility criteria for approval and how much you may be approved for. Most lenders require at least 6-12 months of operation and $5,000-$10,000 in monthly revenue.
Once you’ve determined you likely qualify, you can begin Blursoft’s simple online application. You’ll provide some basic information about your business, ownership details, and the documents you gathered. Blursoft aims for a fast, easy application process that only takes about 15 minutes to complete.
Get Approved and Sign Your Agreement
If approved, Blursoft will present you with an offer for an advance amount and factor rate, which determines your total payback amount. If you accept the terms, you’ll sign a merchant cash advance agreement to finalize the deal. Funding usually takes 3 to 14 days to hit your business bank account.
Repay Through Daily Debit Payments
Blursoft will deduct a fixed daily payment from your credit card transactions to repay the advance. These automatic payments continue until you’ve repaid the full amount owed. There are no set repayment terms, so you can repay the advance quickly as cash flow permits.
So there you have it, the 101 on merchant cash advance and how Blursoft can help your business access fast and flexible funding. While a merchant cash advance isn’t for every business, for those looking to scale quickly or cover short-term cash needs, it can be a game changer. Blursoft’s automated application and funding process means you can focus on what really matters – growing your business. If you’ve been hesitant to apply for a merchant cash advance in the past due to the complexity or cost, Blursoft is changing the game. Their competitive rates, simple terms, and business-friendly approach means there’s never been an easier time to get the funding you need, when you need it. So don’t delay, apply today and see how Blursoft can fuel your business growth. The future is yours for the taking!