Tips - Merchant Cash Advance

As business owners we are always tend to be very busy with our clients when it comes to day-to-days dealing.

Below are some of the best to consider when entering a merchant cash advance agreement:

Contract/Terms & Conditions

Ø  Always read the entire document on contact or terms & conditions which includes the fine print

Ø  Do not sign the document until you have completely read the document and fully understood the provided information in contract

Ø  When not clear, Please ask more questions to your merchant cash advance provider to get more clarity on the information provided in the contract documents

Program Understanding

Ø  Always make sure that you understand exactly as to how much you are paying back to the lender and the percentage that the lender will take from your credit card receivables

Ø  Make sure the percentage is always consistent with your business performance (E.g.:- If you drop below a certain values on the sales for Visa/MasterCard for the month. The cash advance providers do not charge you with a higher percentage of receivables and incase of variable, then understands the risk involved for the same).


Ø  We often come across fees attached to the merchant cash advance are charged by both a direct lender and also by a broker.

Ø  Ask the merchant cash advance provider if apart from the normal fee structure if there is any additional fees associated on UCC filings, Lockbox account setups, switching processors and service fees etc  are  outlined in the contract/terms and conditions provided to us.

No attached collateral – “purchase and sales agreement”.

Ø  The companies dealing with merchant cash advance can pretty much charge whatever “interest rate” they want for the money.  And it is generally accepted by the most of industries as there is no collateral attached to the advance - Always make sure that there are no variables

Home work - Do your homework! 

Ø  Do a survey on multiple companies about obtaining a merchant cash advance.

Ø  Do not submit paper works for too many companies, as too many credit inquiries will always lower your credit scores, and can sometime also scare the other cash advance companies from working with you.

Ø  Make a best utilization of leisure time to read the available forums on the Internet to know more on the current scenarios about the company and the industry

Ø  Make sure the company you are dealing with if they are broker/direct lender?

Ø  Don’t go by the salesman’s word for it

Ø  Always make a habit of doing research yourself to get more clear understanding on the industry and company standards.

If you like this post, you might also like this

Next entry

Previous entry

Related entries

Similar entries

Facebook Google Plus Linked In Twitter Youtube