Many businesses find that a merchant cash advance is an attractive avenue for quick financing. For instance, according to The Balance Small Business, this type of financing can provide funds more quickly than traditional business loans. This post goes over the steps involved in applying for a merchant cash advance. (In this type of funding, the financer immediately extends cash to essentially purchase a portion of the borrower’s future sales.) 

Investigate Your Options

Like most financing options, a good first step in obtaining a merchant cash advance is researching different providers. Figure out each provider’s factor rate and the overall cost of their advance options. Additionally, to avoid wasting your efforts, identify providers whose minimum requirements you meet. Avoid those whose requirements you fall short of.

Line Up Your Credit Card Processor

Your company will need to use a credit card processor approved by the provider. There is a chance your current processor will work, so see if they already work with any advance providers. However, you may need to change processors, in which case providers can give input.

Apply for the Advance

Once you’ve honed in on a specific provider, actually applying for a merchant cash advance is relatively simple. You will need some paperwork, however, including documents covering future projected income, typical revenues from credit cards, your business’s overall financial background, and the business’s legal structure.

Review the Offer

If a provider extends an offer following your application, be sure to review it carefully before accepting it. The offer will cover information such as penalties in the case of default, payment schedules, and the amount of money your company needs to remit to satisfy its end of the contract. Proceed with caution, but if everything looks good, then sign the contract, then enjoy your speedy access to funding!

Want to keep learning? More information on different business topics is available on the rest of OneClick Commercial Funding’s blog posts