What is a merchant cash advance?
When you receive a merchant cash advance from TowersPay, we’ll provide you with a lump sum of capital in exchange for a percentage of your business’s future sales. That means you’ll receive working capital now and we’ll receive a percentage of your sales until the amount of sales we’ve purchased has been received.
Our financing advisors will work closely with you to create a financing plan that will help you grow your business without draining your cash flow. Business owners with a minimum average of $7,500 per month in sales over the last three months generally qualify for an MCA equal to 70-120% in the financing, from as little as $3,000 up to $500,000. We offer fixed and flexible payment schedules, and there is no fixed term.
Is a merchant cash advance right for me?
Merchant cash advances are suitable for a wide range of businesses, such as restaurants or retail stores whose revenue comes primarily from credit card sales. However, MCA rates are often higher than alternative types of business loans. These costs can lead to a debt cycle for some businesses if they have to refinance into another commercial cash advance to repay the debt, which can cause cash flow problems or put them at risk of default. Before turning to a commercial cash advance, small business owners can look for alternatives, such as a flexible line of credit from TowersPay.
How to get a merchant cash advance?
Set Up Reimbursement
Who should apply for a MCA?
Merchant cash advances are ideal for:
- Businesses seeking fast funding – MCAs can be deposited in as little as 24 hours.
- Businesses that process a lot of credit and debit card transactions
- B2C businesses that need smaller amounts of funding
- Businesses with lower credit scores
- Business owners who do not have collateral, such as real estate and other assets
MCA can benefit restaurants, dental offices, lawyers, medical offices, gas stations, pharmacies, and more. Regardless of the industry in which you operate, our expert financing advisors will work closely with you to select the best financing option to help you achieve your business goals without sacrificing cash flow.
How to use a MCA?
There are no restrictions on how a merchant cash advance can be used. MCAs are generally best used to support growth strategies that will help increase your revenue, such as:
- Taking advantage of time-sensitive opportunities to grow.
- Expanding your marketing strategy
- Purchasing inventory or raw materials in bulk
- Upgrading equipment or technology.
- Hiring new staff
- Investing in training and continuing education
Merchant Cash Advance Rates
MCA use factor rates instead of a traditional interest rate. Factor rates are simple decimal figures that show how much “extra” you will owe on the original loan amount. Your factor rate is determined based on a risk assessment. Most factor rates are between 1.1 and 1.5.