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CAUTION: Before you sign on the dotted line, make sure you have read all the fine print and understand all the loan terms. I recently spoke with a borrower who had taken out an MCA loan to fund the purchase of merchandise from overseas. Although the merchandise was pre-sold and the proceeds should have hit his account as planned they were later than expected and the lender emptied his merchant account to make a payment, ultimately causing a serious cash flow problem. Every lender and every MCA loan is different, so make sure you understand exactly what you are agreeing to. This problem could have likely been avoided had the borrower asked a few more questions before the deal was finalized.
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You only need four things to get started Merchant Cash Advance:
Government-issued photo ID. Voided check from your business checking account. Last three statements from your business bank account. Last three credit card processing statements
There are other requirements an MCA lender will consider in addition to your credit score, time in business, and revenue:
You need to maintain at least $2,500 to $5,000 in monthly credit card transactions. You can't already be working with another MCA lender. There are not any current liens on business-owned property. You'll need to provide financial data to validate past sales and monthly credit card receipts.