What is a Merchant Cash Advance
A merchant cash advance, also known as a business cash advance, is basically an agreement by a borrower to sell a percentage of future sales receivables at a slight discount for an up-front bulk cash payment. Most lenders require that you accept credit cards and the agreed upon percentage is deducted automatically from each future sale. This can be very advantageous for borrowers because there isn’t a monthly bulk payment. If the business experiences a slow cycle then the amount being repaid on the advance at the time also decreases. This removes the stress involved with having to make payments during slow business cycles. Also, all the payments are completed electronically so there is very little effort required with the payback process as there is with standard invoices mailed or checks written.