Merchant Cash Advance Means Money When The Bank Turns You Down

A merchant cash advance can provide a stream of cash for your business even if your bank has rejected your business loan application. A merchant cash advance isn’t a business loan, so the decision process for a merchant cash advance is entirely different.

Rapid Capital Funding will purchase a portion of your future credit card transactions in exchange for an up-front cash payment. “Factoring” is growing in popularity as a way to get cash fast. Businesses with accounts receivable sell some of their collectable invoices at a discount for cash up front, allowing the “factor” – the interest that purchased the invoices – to collect the outstanding invoice balance.

A merchant cash advance operates similarly. With a merchant cash advance, you sell a portion of your future credit card transactions. As the transactions are registered, a small portion of the funds is returned to Rapid Capital Funding to repay the advance.

You might wonder whether that means your business will be left short of cash in the future. It won’t. The remainder of the transaction comes back to you. Each merchant cash advance is different, so the percentage of the transaction that repays the advance varies based on factors including the type of business you operate. If your business margins are thin to begin with, the percentage of each transaction that repays the advance is smaller. The payback period will be longer, but the repayment will comfortably fit with the way your business works. For businesses with larger profit margins, your repayment percentage will be larger, and your payback time will be shorter. In either case, your business won’t be left without the cash it needs to operate.

Contact Rapid Capital Funding today for more information on how a merchant cash advance works and how we can help your business.

Photo Credit: Overseas Development Institute

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