A Business Cash Advance and A Merchant Cash Advance are not neccessarly the same thing like so many business owners may believe. There are some key differences between the two and different underwriting guide lines on each.
A Business Cash Advance is a short term loan that is based on a businesses checking account deposit history and average balance. Pre approval on these loans can take as little as 1 hour to 24 hours and funding can occur as soon as 3 to 5 business days. Money is generally wired directly into the lenders checking account once all the neccessary documents are filed and confirmed.
Repayment is a bit different than a traditional loan in which the lender will make a small withdraw out of the businesses checking account daily until the loan is paid back. The amount of the withdraw is a preset amount and will not change during the repayment period. Loan terms are generally 3 to 18 months depending on the lender and there lending guidelines.
A Merchant Cash Advance is abit different though. These short term loans are based on a businesses monthly credit card volume. Cash Advance amounts will generally range from 50% to 200% of a merchants monthly credit card sales. These also have a very fast turn around, pre-approval in less than 24 hours and funding will occur in 3 to 5 days just like a business cash advance.
Repayment on these occurs daily as well, but the loan is paid back daily through your credit card sales for that day. Just like a business cash advance the amount is always the same until the loan is re-payed. Loan terms are also usually 3 to 18 months depending on the merchant advance company you use.
These lenders like to lend to cash flow clients, such as restaurants, grocery stores, taverns, some service companies, contractors pretty much anyone who receives payments regulary and makes deposits frequently into there business accounts.
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