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How Does Merchant Funding Work?

Merchant Funding

Learn how merchant funding works:

Are you a business owner who accepts credit cards as a form of payment?  Maybe merchant funding can help your business with the extra working capital it might need.  If you are strapped for cash and have found out that the banks aren’t lending to business owners as frequently, this is a great solution if you’re in need of cash for your business immediately.  Merchant funding also known as merchant cash advance is another type of lending product that is available to businesses who accepts credit cards as a form of payment for their business.  Most will say that this isn’t a loan, it’s actually the purchase of the businesses future credit card sales.  There is no fixed monthly payment, the payment is based on percentage of the daily credit card sales until the amount that was advance is repaid.

How much can I borrow?

In most cases you will see the advanced amount given will be based approximately 10% of your annual gross revenue.  So for example, if your annual gross sales is $120,000 you can expect to receive approximately $12,000.

How long do I have to repay the advance?

As I mentioned before, there is not a fixed payment associated with this program.  Your payments are based on your daily credit card sales.  There will be a set percentage that will be taken out.  There are huge benefits to this, let’s assume you had a slow day, what if you didn’t have enough to cover that payment?  With this program the payment is based on what you get paid, if you didn’t make money that day there is no payment due.  However, if you had a great day then the payment would be based off that increased revenue you generated that day.  Business owners love this program because it works with them and is very flexible.

What if I have bad credit?

Credit is not a huge factor in the decision making process.  The dollar amount of credit card transactions is what will be considered mostly when issuing a business cash advance.

How long will it take to get approved?

Our approval process is simple and painless.  It typically will take 48 hours to get you an approval.

How long until I get the funds?

Once your business is approved, if you choose to move forward you will sign loan documents and the funding typically will be completed within 3 to 5 business days.  So the whole process from start to finish can actually be as fast as 5 business days.

What can the funds be used for?

There is no limitation on what or how you spend the advance.  Most businesses will use the funds to expand their business, new equipment, inventory, remodeling, advertising, or just about anything.

Is collateral required?

No, there is no collateral required. This is an unsecured loan, no liens or UCC-1 filed.  Other business loan products do require collateral, but not our merchant funding.

Is there any upfront fees or application fees?

There are absolutely no upfront fees.  If you are working with another company that is trying to charge you an upfront fee you need to give us a call.  Free quotes are given for all of our business financing programs.

If you’re interested in hearing more about our business financing programs, please feel free to call First Capital Business Finance 888-565-6692 and one of our loan experts will be happy to answer any of your questions.

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