A merchant cash advance is a business organization that gives out capital to credit card accepting companies in their list. It is not necessarily a loan. Once the business makes a sale in the future, a slight deduction is given to the company. Many small businesses are enrolling with these companies especially over the last couple of years because of the many advantages accrued from it.

Most of the transactions between the company and the business are exactly that; business deals. There are no legal consequences that are bound by the agreement. The business credit rating is not affected by its failure to make payment on time.

The process of applying for the advance is very easy. The providers are mainly interested in how long the business has been operating, and the credit card returns calculated monthly. This simple and straightforward process is preferred as compared to the tiresome evaluation of financial statements and business plans done by commercial lenders.

Because of the little paperwork required when applying for their loans, time taken to process the loan application is very little. Within a span of one week you can get you cash as compared to the long evaluations done by the traditional banks before they consider you for a loan. By so doing, a business is able to take advantage of a favorable situation that may arise in the future.

The companies do not dwell so much on the credit rating of your business. They only check on how well you have been performing over the last couple of months. Any small business that is stable in terms of revenue collection is therefore qualified to apply for their loans. The length of the advance is usually directly proportional to the revenue collected during the previous financial year.

The advances can be returned in different adjustable rates governed by the ratio of sales made by the business. This ensures that the business is not pressed so hard when it comes to paying back the company. If it makes little sales, then the company gets a low commission, unlike the commercial banks that charge a fixed monthly rate.

In addition, once the companies give you funds, they leave you to decide on how to use the money to improve your business unlike the traditional banks that monitor everything you do with their loans. You may opt to expand your business, do some advertisements or renovations if you do not want to use it on working capital. This is good since the business owner knows best what is good for his/her company.

Additionally, one of the best and comforting characteristics of the MCAs is that they have renewals after every three months. This means that you can apply for another funding after three months to improve your business. This sense of reliability attracts small businesses to the companies.

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