A business cash advance is not technically a loan; it is the sale of future credit card sales to a third party. I will discuss in more detail how this works, in today’s article.
In order to receive a business cash advance, you must have a retail point of sale that processes credit cards. The reason for this is your credit card point of sale will be used to sell your future credit card sales. Here is how it works:
Your account with the credit card processing company is also referred to as your merchant account. A business cash advance can also be referred to as a merchant account loan, although this term is not strictly accurate. The lender (purchaser of your future sales) will evaluate the last 6 months of your credit card sales. Typically, the amount they will purchase is limited to one month’s worth of sales.
Repayment of your business cash advance works as follows: They will purchase your future sales at a discount rate, typically around 90% of the total value. So, if you sell $10,000 worth of sales, they will give you $9,000 for them. After this, you will have to switch your merchant account to an account that works with the lender/purchaser of your sales. Each credit card transaction from your customers will have a small portion removed to repay the debt. This amount is structured to take around 6 months. However, if sales are slow, it will take longer. Likewise, if they are quick, it will take less time.
For more information, go to Business Cash Advance at http://www.unsecuredbizloan.com/business-cash-advance/