An online merchant cash advance is a great tool for business owners who need quick access to cash. Business owners who need quick access to cash can look to online lenders for advances against credit card receipts.  As with other financial services, including services offered by brick and mortar stores, there are risks and benefits to using an online cash advance service.

Online Merchant Cash Advance Services:

Business owners always have the option to go to a physical building to apply for a cash advance, but many merchant cash advance (MCA) companies can do everything online. Business owners only need to submit some information online and wait a few days for a decision. As soon as the cash advance is approved, the money should be available within 24 hours.

Contrast this to a bank loan. In addition loan origination fees, the delay could be twice as long. That some banks can do online business loans does not make up for the longer processing time and the application and processing fees.

MCA vendors originally worked only with credit card receipts, because there was a system in place that made it relatively easy to deduct money from credit card charges. Many vendors will not set up advances against debit card receipts and other electronic transactions. This means that online merchant advance services are still an option for the many small businesses that do not take credit cards.

In any case, once the business owner selects an MCA vendor, the next steps are similar to those for getting a loan. The vendor will require an online application that is backed up with various financial records. The vendor will review the documents and follow up with questions, or an offer. The business owner will review the terms and approve the offered advance, or ask for a modification. If no further discussion is required, the vendor will release the funds.

Finding a Good Online Vendor:

An online merchant cash advance can be a bit risky. Brokering fees, application fees, and premiums can really ad up. Not all MCA vendors are equally efficient and competent. However, the overall risk is probably quite low, as fewer than 1% of MCA customers file complaints.

The risks can be managed with a little due diligence:

  1. Deal with a direct lender, not a broker.
  2. Look for members of the industry’s professional association, the North American Merchant Advance Association.
  3. Read the fine print in any contract, as this is your only real legal protection.
  4. Look for a lender with a street address and a phone number you can call.
  5. Look for a vendor with experience dealing with businesses like yours, and with experience making advances of the required size.

Structuring an advance against daily receipts takes some working knowledge of business practices in each industry. Sometimes those processes can be complicated, so structuring a deal might not be easy.

Online Lenders are a Great Business Resource:

Online MCA vendors are a great resource for business owners who have reasonable credit card receipts and need quick access to money. The speed of processing an online merchant advance application makes this option an attractive one relative to applying for a bank loan. Potential clients just need to due a bit of research before selecting an online merchant cash advance partner.

Translate »