What Is A Merchant Cash Advance?

A merchant cash advance is a type of business financing where a lender provides a lump sum of cash to a business in exchange for a percentage of the business's future sales. This type of financing is typically used by businesses that have difficulty qualifying for traditional bank loans due to poor credit history or insufficient collateral. Instead of a traditional loan, the lender advances the funds to the business and recoups the amount over time, often with daily or weekly payments deducted from the business's bank account. The amount the business pays back is usually based on a percentage of its daily credit and debit card sales, making it a flexible financing option that can help businesses with irregular revenue streams.

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