The merchant cash advance is a method used for many small business owners for their business financing. But, you have to keep in mind that everything has both advantages and disadvantages so the same case in merchant cash advance. Following are the pros the cons of merchant cash advance:-    

The Pros  

Renewable

If merchant have repaid 60 percent of advance, they will be able to renew their funds. While renewing, there is no need for additional application and providers will be able to transfer these funds into your accounts within 2 days. It must be noted that merchants will be able to renew their advances as many times as they wish for.

Minimal Requirements

The merchant cash advance requires very few requirements to be eligible as compared to traditional methods of business funding. To get merchant cash advance you should have at least 3,500 dollars in monthly credit card sales, owned business for at least 6 months and have no unresolved bankruptcies.   

Flexible Repayment

In Merchant Cash Advance there is a provision of flexible repayment. While Business cash advance borrowers will not be able to make fixed monthly payments. The advance will be repaid through their daily credit card sales. In other words, you can say that there is no time frame in which the advance must be repaid. So, you can take about 6 to 8 months to completely repay an advance.  

The Cons

You must own a retail oriented business

If you are small business owner and don’t operate merchant businesses, then you will not be able use merchant cash advances. It is due to the fact that repayments are made only through a small percentage which is deducted from the business’ daily credit card sales.  

Expensive

The Merchant cash advances are expensive as compared to other business loans or bank loans. It is because merchant cash advance providers are on higher risk than business cash advance or banks. So, merchants who are qualified for bank loans will be encouraged to take them instead of merchant cash advance.

Not for startups  

To become eligible for merchant cash advance, merchants must build up at least 6 month track record. This is because the merchant cash advances providers will use merchant’s monthly credit card sales to determine how much they are qualify to receive.

A newly established business doesn’t have a merchant statements or track record. So they are not eligible for merchant cash advances.

We hope the Information given by us will immensely help you to choose Merchant Cash Advance wisely.