A Merchant Cash Advance (MCA) allows businesses to access capital quickly based on their future credit card sales. It’s an ideal solution for businesses that need immediate funds to manage expenses, seize opportunities, or invest in growth, without the lengthy application process associated with traditional loans.
How It Works
With an MCA, your business receives a lump sum of cash upfront, which is repaid by deducting a percentage of your daily credit card sales. The repayment adjusts according to your sales volume, so on slower days, you pay less. This flexibility makes it a convenient option for businesses with fluctuating cash flows.
Benefits
Fast access to capital: Receive funding within 24 to 48 hours.
Flexible repayment: Payments fluctuate with your sales volume, easing cash flow concerns.
No fixed payments: Repay as a percentage of sales, making it more adaptable to your business performance.
Minimal paperwork: Simplified application process with no need for collateral.
Term Loan
Overview
A Term Loan is a fixed amount of capital provided to businesses for major investments or expenses. This loan type is best suited for companies looking to expand operations, purchase equipment, or undertake other significant projects with the assurance of fixed monthly payments over a set period.
How It Works
With a Term Loan, you receive a one-time lump sum of capital, which you repay through fixed monthly payments over a predetermined period. The interest rate remains fixed, providing certainty on your repayment schedule and making it easier to plan your finances. This is an ideal choice for long-term investments or larger expenditures.
Benefits
Large capital amounts: Ideal for significant investments or business expansion.
Fixed payments: Easy to budget with a consistent monthly payment plan.
Predictable interest rates: Protects you from market fluctuations, ensuring the loan cost remains stable.
Flexible terms: Choose a repayment schedule that suits your business’s financial health.
Line of Credit
Overview
A Line of Credit is a revolving credit facility that allows businesses to access funds when needed. Unlike a term loan, a line of credit gives you the flexibility to draw and repay funds multiple times as needed, making it ideal for managing cash flow, covering short-term expenses, or seizing opportunities.
How It Works
A Line of Credit works like a credit card, where you have access to a set credit limit but only pay interest on the amount you use. You can draw from the credit line whenever you need funds and repay at your own pace. Once repaid, those funds become available again, allowing continuous access to capital.
Benefits
Flexible borrowing: Access funds when needed without reapplying.
Pay only for what you use: Interest is charged only on the amount you withdraw.
Revolving credit: Once repaid, the funds are available again, giving you ongoing financial support.
Ideal for cash flow management: Perfect for handling short-term needs or unexpected expenses.
