What Is An MCA Platform?
An MCA Platform provides you with a great way to get funding for your business without the bothers of traditional bank loans. Read on to why you should choose the MCA Platform over other slow and expensive conventional loans.
Merchant Cash Advance is perfect for business owners that face difficulty securing traditional business loans. In addition, businesses that are starting up or do not have steady cash flow cannot ensure regular payments.
It helps business owners as the cash advance needs to be repaid only with credit card receipts. Merchant Cash Advance is the option for entrepreneurs unwilling or unable to take out traditional loans.
How Can an MCA Platform Help A Smart Business Owner?
MCA Platform helps business owners opportunities for better types of funding opportunities. The business cash advance industry is climbing at a continuous rate. This ever-increasing growth is because traditional bank loans are not meeting the demands of small business owners.
MCA is a unique funding method. It is a buying of future credit card sales, not a loan. So, we have to use explicit language consistent with future credit card sales purchases.
Merchant Cash Advances are a lot like factoring but are based on a scale that hasn’t occurred yet. For example, a business cash advance investor gives business owners a sum of cash advance open.
In exchange, the business owner decides to pay back the principal amount plus the fee by giving the moneylender a daily percentage of their visa and master card sales until the payback is finished.
Suppose you are running a business and find it challenging to qualify for and obtain a loan from your bank. In that case, Merchant Cash Advances might present one of your most viable alternatives.
Cash advances can be particularly convenient when experiencing a cash crunch but are confident that the business has sufficient cash flows to service the debt.
The requirements for getting the advance are not as strict as applying for a loan. However, one needs to be over 18 years of age, have a reliable source of credit card sales income, and have a checking account.
Processing, approval, and payment also take place quickly, making it ideal for when you need money fast.
Benefits of an MCA Platform:
MCAs can work very well for hotels, retail shops, restaurants, and travel agencies with various credit card sales volumes. The chief benefits associated with the MCA platform include:
- No Fixed Monthly Payments
A Merchant Cash Advance is not a loan that needs you to make fixed monthly payments, whether you can afford them or not. Therefore, you do not have to worry more about them.
- Fast Processing and Turnaround
The best thing about an MCA Platform is the time of the process. All that the provider is keen on would be your credit card sales volume. And if you can prove you have a good book, you obtain the cash directly. So there is no need to stress over credit scores and other documentation.
While traditional bank loans ask you for financial documentation, you do not have to provide your tax returns, financial statements, or other asset documentation to MCA providers. As a result, you also avoid pointless and intrusive questioning that is a vital part of the traditional bank loaning industry.
- No Personal Credit At Stake
Merchant advance does not put your credit and assets at stake if your business venture is unsuccessful. It is treated as a purchase of future sales and not as a loan. Consequently, it does not affect your future funding. Conventional bank loans with default risk and risk of exclusion from future funding cannot offer you these benefits.
- High Approval Rate
Unlike banks, MCA providers are not busy approving applications. Therefore, cash requirements do not include low FICO and earlier bankruptcies as criteria for rejection. Instead, your application is judged only on two factors alone, the number of months in business & monthly credit card sales.
- Repayment Flexibility
Merchant Cash Advance is flexible, and the monthly repayment amount differs with your business performance. While conventional bank loans force you to refund a fixed amount every month and charge you hefty penalties for missing your loan repayment due dates, MCA imposes no such conditions. Instead, you initiate a fixed percentage of your future credit card sales to the advance workers.
- No Upfront Charges
Unlike conventional bank loans, you don’t have to pay any upfront costs, including application fees and closing costs for Merchant Cash Advance.
- Payments Become Very Convenient
You pay a percentage of your daily credit card sales reliant upon the volume. Therefore, the payments are very convenient to make as they happen routinely.
- You Don’t Feel The Pinch
Since there is no specific amount to be paid daily, you do not feel the tweak to pay back the loan here. So don’t stress about saving up the amount needed to pay back the provider.
Verdict On An MCA Platform
So, if your business admits credit cards and has been trading for a long time, you are likely to qualify for the Merchant Cash Advance.
The trade will acquire your future credit and debit card receipts, and you can take a cash injection into your business within days.
Your repayments are taken as a ratio of the amount of business you process on your card dealings. The lender gets paid when your business gets paid. An MCA Platform can be beneficial for all the companies which need immediate cash to take care of their expenses.
However, there are certain things these businesses have to keep in mind before applying for such a loan. The first thing is they have to ensure their credit card sales volume is very high, and they are left with enough money to take care of their working costs after paying back the provider.
Another thing they have to recognize is that there are various costs involved with MCA. It may prove higher than a regular loan. The percentage of the credit card sales they have to pay is also much high.