Online Business Owners: 5 Merchant Cash Advance Advantages

Posted by Factor Funding Staff on February 19, 2015

The Internet is the place to be when you want have the best chance of making it in the business world today. Having an online presence tells your customers that you are a versatile and legitimate business and that you can give them the convenience and speed of service they prefer.


However, your biggest fear in running an online business may center on what kind of financing you can get to bulk up your cash flow as needed. When you utilize a merchant cash advance, you can take enjoy fast access to money and also reap unique benefits that cannot be found with traditional bank financing.

1) Financing without a Physical Location

You can qualify for a merchant cash advance without your business' physical location being restricted to one place over another. Banks typically want to extend financing to local companies or to businesses that have a set location.

However, you, just like many other virtual businessmen and women, may not have a set location, but rather enjoy flexibility of relocating your physical address as needed. Despite not having a headquarter location, you can still qualify for a merchant cash advance as long as you take credit card payments.

2) Easier Credit Terms

One of the biggest deterrents to banks when making business loans involves the creditworthiness of the person or company applying for financing. If you have yet to establish a solid credit score, yet still need money for your virtual company, you more than likely will be turned down by a traditional bank lender.

With an MCA, however, you enjoy easier credit terms. In fact, because this financing is not really a loan, you can be approved as long as you accept credit card payments and will have the needed credit card sales coming in during the immediate future. You can be approved even with a low credit score.

3) No Traditional Collateral

With an MCA, the only collateral you will need for approval is your credit card sales. You will not be required to put up traditional collateral that banks require, such as:

  • Equipment
  • Buildings or Real Estate
  • Insurance Policies
  • Bank Accounts

In fact, as an online business owner, you may have few, if any, of these items available to secure financing. Even so, you can get the money you need today by allowing your MCA lender to buy a portion of your future credit card sales.

4) Business Growth

An MCA lets you grow your Internet company and take it in the direction you have always envisioned. You are not restricted in how you can use your money. In fact, you are welcome to use the funds from your merchant cash advance to:

  • Buy new products or create new services
  • Advertise
  • Pay for website hosting fees and other expenses
  • Meet with and attract new vendors to your company

Unlike a bank lender, who may require a full accounting for how and why you spent the money, your MCA lender will give you freedom to utilize the cash for whatever business purposes you see fit.

5) Convenient Payment Terms

Just as with a traditional business, your own Internet company may experience highs and lows that make paying back a loan difficult. Your MCA, however, will be repaid in accordance with the amount of credit card sales you bring in each month.

Rather than demanding a set dollar amount each month like a bank lender, the merchant cash advance company will claim a percentage of your credit card sales. This percentage stands firm regardless of how much money you actually bring in; this term matches the pace of your business and makes it easier for you to repay the advance. You also avoid any set deadline by which the amount must be repaid.

Restrictions for MCA Use

As convenient as a merchant cash advance can be for many Internet business owners, you should understand that this financing does come with some limitations. It may not be right for you if your business:

  • Has a low volume and thin margin
  • Is brand new and has yet to build up a solid client base
  • Is failing and needs to be bailed out
  • Does not take credit card payments

However, if your business is established, you have credit card payments coming in on a regular basis, and you need money to add to your cash flow, you may consider an MCA instead of a bank loan. These unique advantages help online company owners become more successful and grow their businesses.

merchant cash advance guide