What is a Merchant Cash Advance?
Merchant Cash Advance loans provide businesses with bad credit an upfront payment based on their credit card sales in exchange for a percentage of future sales. The loan is paid back over an agreed-upon period, allowing businesses to bridge the gap between when they need cash and when they receive revenue.
What are the qualifications for getting a Merchant Cash Advance with bad credit?
If you're a business with bad credit and have been accepting credit cards for three months or less, you may be eligible for a Merchant Cash Advance. Generally, lenders will look at the overall health of the business, including sales, cash flow, and credit history, to determine eligibility. Some lenders may also consider the length of time in business and the size of the company.
How do you apply for a Merchant Cash Advance with bad credit?
Step 1: Research the different merchant financing companies
Research what lenders and companies offer to find the best deal for your business. Ask someone who knows these things to help you make the right choice to get the best possible financing solution that meets your needs.
Step 2: Evaluate the business loan rates and terms
Businesses should compare financing options with an advisor and select the one that fits their needs. Understand repayment terms, APR, and interest rates, as they can affect costs.
Step 3: Gather the required documents
To apply for a Merchant Cash Advance, businesses must fill out a form and get pre-approval. They must upload valid forms of ID, bank account and routing numbers, and the last three months of statements.
Step 4: Submit your application
Business owners with bad credit can apply for a Merchant Cash Advance in a few steps: submit personal info & business docs, get a pre-approval decision in minutes, and receive funding in 24 hrs.
Step 5: Read and review the contract
Business owners should review financing options, understand all terms, ask questions, obtain a pre-approval decision, and complete the necessary paperwork.
Step 6: Submit the supporting documents
Documents needed for a Merchant Cash Advance: valid ID, business bank info, credit card processing statements, form, and pre-approval decision.
Step 7: Monitor the progress of your application
Monitor the progress of the Merchant Cash Advance app to ensure all steps are taken. Stay up-to-date on request status and meet criteria for approval quickly. Address issues/complications promptly for efficient funds securing.
Step 8: Get your funds
Once your application is approved, you'll need to sign and return the contract before transferring the money to your bank account.
What should financing options be considered regarding interest rates and repayment terms when applying for MCA with bad credit?
1. Traditional bank loan
Traditional bank loans offer low-interest rates, fast funding, and more competitive terms than other financing options. Unlike merchant cash advances, no credit requirements or high minimum revenues are needed—no need to process credit cards to qualify.
LendTek offers merchant cash advance. The lender often forms a partnership with credit card companies and collects a percentage of each sale. Payments are a percentage of each sale so repayment is not a burden when business is slow.
3. PayPal Working Capital
PayPal Working Capital makes it easy to get financing, with up to 35% of annual PayPal sales available. A PayPal Business/Premier account is all you need; you'll have the money for 3+ months. There's a flat fee based on your daily percentage, loan amount, and PayPal sales. No rejection if you're not in bankruptcy/eviction.
4. Fora Financial
Fora Financial is a financial services company offering QuickBooks support, merchant cash advances, and more. MCAs require only six months of business and are processed quickly, with funds available in 72 hours. Early repayment can earn a discount. Application is a one-page form plus three months of bank/credit card statements – even for those with bad credit.
5. Reliant Funding
Reliant Funding offers quick access to up to $400,000 for businesses with at least six months of history and $60,000 in annual revenue. No minimum credit score or collateral is required. Get funding the next day with flexible terms and pay back in daily or weekly installments.
6. Libertas Funding
Libertas Funding offers loans of up to $3 million to businesses with credit scores of 550 and $150K annual revenue. 3-12 months repayment, with a 3% fee and loyalty discounts. Early repayment? Get 10-25% discounts—loans of up to $1 million with quick and flexible repayment options.
7. Expansion Capital Group
Expansion Capital Group is a company that will give you money to help your business, no matter your credit score. They can provide you with up to $300,000 in a few hours. The repayment terms can be from 3-12 months, and the interest rates will vary depending on the loan you are getting.
8. Kalamata Capital Group
Kalamata Capital Group funds small businesses, especially those with bad credit. They offer merchant cash advances with lower qualifications & factor rates than most lenders, up to $500,000 with approval in as little as three hours.
Credibly offers MCA loans up to $400,000 with automatic deduction of daily sales. There is a one-time 2.5% fee and a $50/month admin fee. Repayment time is 3-18 months, providing better options than traditional lenders.
10. Rapid Finance
Rapid Finance is ideal for businesses with poor credit open for 3+ months. Apply anytime, anywhere, with any device. Advisors help find the best option. Offers merchant cash advances, lines of credit, and short-term loans with flexible payment options. Get up to $500,000 with a 1.22-factor rate, and you can have the money in your account within 24 hours.
Final Thoughts on Merchant Cash Advance with Bad Credit?
A merchant cash advance can be a great option if you need access to capital but have bad credit. No credit check is required, and repayments are tailored to your business needs. However, these advances can be expensive, so compare lenders and shop around for the best rate and terms.
Lendtek offers Merchant Cash Advance to qualified people. Get started today! Simple, fast funding in less than 24 hours!