FAQ's About Merchant Cash Advances

What are the Fees Associated With an MCA?

Merchant cash advance (MCA) providers typically charge fees based on a factor rate, which is expressed as a decimal or percentage of the amount funded. The factor rate can vary widely, ranging from 1.1 to 1.5 or higher, depending on the lender and the terms of the agreement.

For example, if you receive an MCA for £100,000 with a factor rate of 1.3, you would owe the lender £130,000 in total. The fees associated with the MCA are the difference between the amount funded and the total amount owed.

Do I Need Good Credit to Qualify for an MCA?

No, you do not necessarily need good credit to qualify for a merchant cash advance (MCA). MCA providers typically look at a business's revenue and cash flow to determine eligibility and funding amounts, rather than solely relying on personal or business credit scores.

In fact, some MCA providers specialize in working with businesses that have poor credit or have been turned down for traditional loans. However, it is important to note that having good credit can help you qualify for better terms and rates.

While credit score is not the main factor in MCA approval, some providers may still conduct a credit check as part of the application process. This is usually to verify your identity and to assess your overall creditworthiness. However, the credit check will not be the sole determining factor in your approval or funding amount.

Instead, MCA providers will typically focus on your business's revenue and cash flow to determine how much funding you qualify for. This means that businesses with a steady stream of income and strong cash flow are more likely to be approved for higher funding amounts.

It is important to note that while MCA funding can be easier to obtain than traditional loans, it can also be more expensive due to higher fees and interest rates. As such, it is important to carefully consider the terms and fees associated with an MCA before accepting funding.

How Long Does it Take to Receive Funding Through an MCA?

The time it takes to receive funding through a merchant cash advance (MCA) can vary depending on several factors, including the lender's processes, the amount of funding requested, and the complexity of the application.

In general, the application and funding process for an MCA is typically faster than traditional loans, with funding often available within a few days to a week.

The initial application for an MCA typically only takes a few minutes to complete, and can often be done online. Once the application is submitted, the lender will typically review the information provided and may request additional documentation, such as bank statements or business tax returns.

Once the lender has all the necessary information and documentation, they will review the application and determine whether to approve the funding request. If approved, the lender will typically provide a funding offer outlining the amount of funding available, the factor rate, and any associated fees.

Once the funding offer is accepted, the lender will typically transfer the funds to the business's bank account within a few business days.

However, it is important to note that the timeline for receiving funding through an MCA can vary widely depending on the lender and the specifics of the application. Some lenders may be able to provide funding within 24 hours, while others may take longer. As such, it is important to carefully review the lender's processes and timelines before applying for funding.

Can I Still get a Merchant Cash Advance if i Take Payments Online?

Yes, if you take payments online, you may still be eligible for a merchant cash advance (MCA). In fact, many MCA providers work with businesses that accept payments online, as well as those that operate primarily in-person.

When you apply for an MCA, the lender will typically ask for information about your business, including its revenue, cash flow, and payment processing methods. If your business accepts payments online, you may be asked to provide information about the payment processor you use, such as PayPal or Stripe.

In some cases, MCA providers may prefer to work with businesses that use certain payment processing methods. For example, some providers may prefer to work with businesses that use a payment processor that they have a relationship with, or that they believe is more secure or reliable.

However, in general, the payment processing method you use is not a major factor in the decision to approve funding. Instead, MCA providers will focus on your business's revenue and cash flow to determine whether you are eligible for funding and at what rate.

It is worth noting that if your business accepts payments through a third-party payment processor, the MCA provider may require access to your payment processing account to verify your revenue and cash flow. This is done to ensure that the lender has an accurate picture of your business's financial situation and can make an informed decision about funding.

In conclusion, if you take payments online, you may still be eligible for a merchant cash advance. MCA providers typically focus on your business's revenue and cash flow to determine eligibility for funding, and the payment processing method you use is not a major factor in the decision. However, it is important to be prepared to provide information about your payment processing methods and, in some cases, to give the lender access to your payment processing account to verify your revenue and cash flow. - https://ukcommercialfinance.co.uk/