Marcel opened his dream candy store a little over a year ago. His store is the only one of its kind within miles, and everyone goes to his shop when they need to satisfy a sweet tooth. Since business is prospering, and Marcel has had some time to get his feet wet as a business owner, he is now ready to take on a new challenge; opening a new location in another city. All he needs now is a little more money to finance his latest business venture.
Marcel decided that applying for a merchant cash advance would be the most lucrative route for him and his business. But after conducting an online search for “merchant cash advances,” he was astonished by the abundance of merchant cash advance lenders, and struggled in his decision of which company to work with.
As a business owner, you can probably relate to this story. Choosing a merchant cash advance lender can be a difficult process. In order to eliminate the confusion of this process, there are a few things that you should consider when choosing the merchant cash advance lender that is best for you.
Most lenders will not charge a slew of additional costs upon approval of a merchant cash advance. With some business transactions, closing costs are required. These are costs beyond the price of your item of purchase that are usually paid at the close of your transaction. Before choosing a merchant cash advance lender, make sure that there will be know closing costs in addition to the fee for the cash advance.
You also should not have to pay interest on a merchant cash advance. Unlike business loans, most merchant cash advance companies will not impose interest rates.
Monthly Credit Card Sales
The amount of credit card sales that your business processes each month can be one of the factors that determine which lender you can receive a merchant cash advance from. Before approving a loan, most lenders will require you to submit a certain amount of your business’ most recent, consecutive credit card statements. This is to determine whether or not your business can support a merchant cash advance repayment. Usually, you will be required to provide three to six months of credit card statements, giving lenders an idea of your average monthly income.