Blurring the line between cash advances and loans
However, the percentage that is collected never changes, keeping your business cash flow stable
Up to this point, we’ve talked about different types of loans, short and long, secured and unsecured business loans and even revolving lines of credit. Remember how we mentioned there was a bright side to short-term loans? There are alternative financing sources for small businesses besides loans and lines of credit. Merchant cash advances (MCA) have been around since the 1990’s and businesses in the merchant cash advance industry were the pioneers in alternative financing. MCAs aren’t a traditional business loan. In fact, they’re very different.
The fine line between the two is that an MCA provides your business with a lump sum upfront, but rather than requiring monthly installments, a cash advance is remitted using a percentage of future credit card and debit card sales or receivables withdrawn directly from your daily credit card revenue. (lebih…)