6 Ways to Get Approved for a Merchant Cash Advance
If you need fast funding for your business, a conventional business loan may not be your best option. Instead, you need something that provides you with the money you need quickly. For businesses that receive a significant portion of revenue from credit and debit card sales, a merchant cash advance offers a solution.
Contrary to what many believe, an MCA isn’t a loan; it’s an advance on future card sales. Qualifying is easier than a conventional loan, but lenders still look at various factors to determine your eligibility. If you’re considering an MCA, here are six ways to help you get approved.
Make Sure an MCA Is the Right Solution
While a merchant cash advance can be beneficial to some, it’s not necessarily right for all businesses. Businesses in service industries such as retail and restaurants are some of the ones the benefit the most. If you don’t have many customers paying by credit card, you may want to look for a different solution.
Know Your Credit Score
Your credit score isn’t the main factor when it comes to determining eligibility, but it’s still a critical component. Your lender wants to be assured you’ll repay your advance, so they’ll look at your credit history to check your payment history and look for issues such as defaults.
Get Your Credit Card Statements Ready
Since an MCA is an advance on future credit card sales, any lender will want to see how much business you do with this method of payment. Credit card statements will help to show that you can repay the advance.
Be Mindful of Your Transaction History
Lenders will also look at your current and past transaction history to check for bounced checks or cases of insufficient funds. Businesses that have trouble meeting financial obligations are more likely to get denied for an MCA.
Demonstrate Strong Sales
You repay your MCA daily or weekly directly from your credit card sales. The stronger your daily sales, the better your chances of obtaining the lowest rates and best terms.
Shop Around for the Best Rates
Not all merchant cash advance lenders are the same. Every lender has its own rates, terms, and fees. Shopping around and comparing essential information will help you to find the best lender for your business.
A merchant cash advance isn’t the right solution for every business. It can, however, be a lifesaver for those who qualify. Prepare your documents ahead of time and shop around to help you find the best option for your needs.
