Why a Merchant Cash Advance from Merchant Cash Advance US is not a loan.
Many things separate Merchant Cash Advances from loans. A
merchant cash advance is in fact a totally different form of financing that
serves the same purpose as a loan getting the business owner much needed
capital, but it is not structured as a loan.
Merchant Cash Advance US cash advances are not loans—rather, they are a sale of a portion of future credit and/or
debit card sales. Therefore, merchant cash advance companies claim that they are not bound by state
usury laws that limit lenders from charging high-interest rates.
Why would I need a merchant cash advance? This type of businessfinancing is typically used by people who need to get cash in a pinch, as well as people who want to borrow money
but have less than perfect credit.
Since this is not a traditional loan there is not a
traditional interest rate that is calculated. In fact since you are borrowing
against future credit card sales to calculate the costs of a merchant cash
advance it is pretty simple. First need to know the total advance amount and your factor rate—(those should be easy to
find in your merchant cash
advance offer).
You'll also need to know the fixed percentage the merchant cash advance company will take from your daily credit card sales.
An MCA is
advantageous for businesses with unsteady cash flow or seasonal business cycles, as it's not a fixed
amount of money demanded each day, but a percentage of your sales.
Is a cash advance tax
deductible?
That
really comes down to how your business is set up. IT will be a simple question
you can ask your accountant. In a nutshell merchant cash advances have a neutral effect on the taxation of the business;
you can deduct the fees paid to the cash advance company as a
business expense, a cash advance will not shelter any of the
business's income from taxes, but neither do they subject it to any more
taxation than it otherwise would be.
Merchant cash Advances can be used for any
purpose?
Yes once you have
received your cash advance you are free to do with it what you will. In the
application process there is no predetermined usage necessary. Typically a
business needs some fast cash to get thru a slow period or to pay off some back
taxes. Other purposes may be to hire some new employees increase inventory or
purchase a piece of equipment.
What types of businesses qualify for a
merchant cash advance?
Many types of
businesses qualify for this type of financing. Essentially if you accept credit
cards you qualify! Auto services businesses, retail businesses, and wholesale
businesses and online businesses, high risk businesses as long as you accept
credit cards and have at least 3 months of statements you can qualify!
How long does it take to complete the
application process and get funded?
Since a Merchant
Cash Advance is not a loan it is faster than traditional lending. Typically a
one page application and 3 months of processing receipts will get you funded in
as little as 72 hrs! The money once approved is electronically transferred directly
into your bank account.
If you are
interested in a merchant cash advance and your business is located in the
United States contact Merchant Cash Advance US. A Fast Friendly, Professional
Merchant Cash Advance Company.
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