We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

What is merchant cash advance

Larrybono123Larrybono123 subscriber Posts: 1
edited September 2013 in Growth Funding
What is merchant cash advance & how does it works for small or large business owners.Does it really help those who want to start their business.


  • parthgparthg subscriber Posts: 0
    Merchant cash advance is not a loan but it is a credit card receivable funding. In short your business
    sells a portion of future credit card sales to a merchant cash advance provider for working capital.
    Hope this helps.
  • BusinessLoansBusinessLoans subscriber Posts: 0
    Merchant cash advances or business cash advances are not for start up businesses. If your business like Slinkees has been accepting credit and debit card payments from customers (through your merchant services account) - you can get an advance against your future credit and debit card sales and then make payment based on a small portion - usually around 5% of all your future sales until the advance is paid back.
    But, most start ups do not qualify for these as most lenders (called factors) want your business to already be accepting credit and debit cards for at least a year. Although I have seen some go as low as 4 months.
    These lenders usually do not have high credit score requirements like the revenue based lender that posted here but know that merchant cash advances are working capital products and not really designed for start up companies.
    You can check out www.businessmoneytoday.com for more information about these products, how they work as well as where you might be able to find some start up capital to get you to the point that you qualify for working capital loans.
Sign In or Register to comment.