When used wisely, a merchant cash advance can help your business, but it is not the right option for everyone. 

Consider these factors when deciding whether you should apply for an advance for your business:

  • Quick and hassle-free: Lending decisions are quick, and applications are short and simple, for a business cash advance.  
  • Easiest financing option to qualify for: The merchant cash advance amount is based on your credit card sales, so your credit score generally has less weight when seeking approval for the advance. Even if you have a low credit score, your business could qualify. 
  • Payments are taken frequently: You typically pay the agreed percentage of your sales daily, which can cause cash flow issues for some businesses. However, this helps you pay off high-interest advances quickly. Paying quickly won’t save you any money, but it does provide peace of mind. 
  • Payments rise or fall with your business income: Merchant advance repayment schedules are calculated as a percentage of sales, so if you haven’t done much business today, your payment will be lower. 
  • May be relatively low risk for you: Depending upon your business history, your lender might (or might not) require a personal guarantee of repayment. If the lender does not require this guarantee, the advance may be non-recoupable (non-collectible), even if your company goes out of business. As long as you don’t get into a cycle of repeated cash advances, this financial option could be right for your company. 
  • Contracts can be complex: Make sure you read and understand the entire merchant cash advance agreement so that you can make an informed decision about taking the advance. For instance, business cash advances are typically considered commercial transactions, rather than loans, so they are not subject to the same government regulations as bank loans. Also, you should always ask if the lender will do a hard pull on your credit, which could affect your score.   
  • For more information on the benefits of a Merchant Cash Advance we recommend you click here and take a look at this popular book.

Get the details about our merchant cash advance and compare all your business funding options to decide which is right for your business needs. Contact Aspen Commercial Lending today. Or, if you know this is the right product for you, click here to get the application process started.