MCA

Payments are flexible

Unlike a traditional bank loan, in which you’re locked into a fixed payment plan, merchant cash advance payments are proportional to the amount of business you bring in each month.

You don’t have to put up any collateral

If you’re worried about personal liability, a merchant cash advance could be a wise choice to fund your startup. Unlike other means of financing, your company assets are not at risk should you default on the payments. This is because there is no collateral requirement for Cash Advances.

Speedy approvals and release of funds

You’re unlikely to come across a business applying for a loan that isn’t in need of the funding as soon as possible. Unlike traditional bank loans that have lengthy application processes and take longer to allocate financing, MCAs have comparatively faster approval rates and subsequent release of funds. As mentioned earlier, many lending firms guarantee a decision within a day or two. When you’re in a cash flow emergency, this quick turnaround can be a lifesaver for your business.

What are some of the cons of merchant cash advance for startups?

Merchant cash advances, while boasting the advantages listed above, also come with a fair share of disadvantages, which we will solve.

Merchant cash advances aren’t regulated

Unlike highly regulated banks and lending firms, merchant cash advance providers aren’t bound by legal restrictions. For that reason, some MCA contracts charge extremely high interest rates and tack on unreasonable repayment terms—capitalizing on potentially desperate business owners.

They’re more expensive than traditional loans

Compared to other financial products, MCAs are comparatively more expensive. While business loan rates generally range from 6.25% and 12%, merchant cash advance rates can fall anywhere from 5% to 20%. In fact, the annual percentage rate (APR) for an MCA fee expensive, however we can consolidate the loan so payments are reduced and then show you with a simple passive investment pay off that consolidation loan. In essence Free Money .