Best Cash advance Loans


Business Cash Advance

A merchant cash advance is a fast and easy way to get small-business financing. In fact, it may be too fast and easy. Rather than quickly opting for an MCA, you should pause to consider whether a merchant cash advance is your best — or only — option.

An MCA is not a loan but an advance against future credit and debit card sales. You pay it back daily by sending a set percentage of that day’s card sales directly to the lender. The annual percentage rate is 70% to 350%, much higher than small-business loans from banks or online lenders.

And if you’re not careful, one merchant cash advance can lead to another and another, creating a debt spiral that can be hard to stop.

The merchant cash advance dilemma: speed vs. cost

MCA providers stress the convenience and speed. CAN Capital, a leading provider of merchant cash advances, says the financing is “cash-flow friendly.”

“You don’t have to worry about fixed monthly payments during tough times, and there is no set maturity date, ” the company says.

The flexible repayment does make MCAs an attractive option for some small-business owners, says Deborah Sweeney, CEO of MyCorporation.com, which helps entrepreneurs set up a small businesses.

“The cash advance traditionally fluctuates directly with the merchant’s sales volumes, ” she tells NerdWallet. “This gives a business owner flexibility with which to manage their cash flow, particularly during a slow season. When business is slow, the money withdrawn decreases, and increases during busier times.”

But that convenience, other experts tell NerdWallet, is offset by a potentially huge risk: If you don’t plan ahead, a merchant cash advance could lead you into a debt trap.

“While they are fast and easily accessible, their short, short duration and very high effective rates drive many small businesses into downward cycles of reborrowing, ” Sam Hodges, founder of online lender Funding Circle, tells NerdWallet. “They take out more and more debt to roll over their repayment obligations.”

MCAs can begin to stack up

Candace Klein, chief strategy officer at alternative lender Dealstruck says: “We have seen many borrowers who make the mistake of seeking an MCA, which is a fixed financing option, for a revolving capital need, like payroll or inventory. Several months after taking the first advance, they find themselves in need of another.” The advances overlap and stack up, she adds, and eventually the business is in trouble.

Funding Circle and Dealstruck are among online lenders offering alternatives to merchant cash advances.

Craig Everett of Pepperdine University’s Graziadio School of Business and Management also sounds a cautionary note about merchant cash advances.

An MCA might work as a “one-time thing to get through a rough patch, ” says Everett, a professor of finance. “If it becomes an addiction, then it will eventually destroy the value of the business.”

MCA is ‘expensive money’

John Moore, professor of finance, economics and accounting at Walsh College in Michigan, calls merchant cash advances “expensive money.” “The entrepreneur should exhaust all its cheaper sources of financing first, ” Moore says.

To give you an idea of other options, below we compare annual percentage rates and the speed of approval for some major online lenders. You can see more on NerdWallet’s small-business loans page.

Cost of Funding (APR) Approval Time
70%-350% Within 1 week
OnDeck (Read our OnDeck review.) 9%-98% on term loans; 14%-36% on lines of credit Decisions within minutes, funding in as little as 24 hours
Funding Circle (Read our Funding Circle review.) 7%-26% Less than 10 days
DealStruck (Read our DealStruck review.) 11%-22% +prime on lines of credit; 11%-28% on term loans Prequalification in minutes, offer letter in 2-3 days, average of 10 days to funding

If you are considering a merchant cash advance, Moore recommends consulting a financial professional and developing “a cash-flow forecast that demonstrates the business’s ability to repay.”

If the analysis “cannot prove that the loan can be safely repaid within a reasonable time frame, ” he says, “the business should not take out the loan.”

Find and compare small-business loans

To find alternatives to merchant cash advances, NerdWallet has generated a list of the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged them by categories that include your revenue and how long you’ve been in business.

Compare business loans

To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Interesting facts

  • CRIF is currently the market leader in continental Europe in the field of banking credit information and one of the main international players for business & commercial information and credit & marketing management services.
    CRIF has a wide range of different activities, like decision-support models, consultancy and management solutions...
  • The Student Awards Agency for Scotland (SAAS) is an Executive agency of the Scottish Government. It pays the tuition fees of eligible Scottish higher education students, bursaries and supplementary grants. It also assesses students applying for loans. The Agency administers the Individual Learning Accounts Scotland scheme (ILA's) in partnership...

Additional information


APRs For Cash Advance Loans Dont Take The Cake
APRs For Cash Advance Loans Dont Take The Cake
Get Instant Cash Advance Loans - CashAdvanceUsa.net
Get Instant Cash Advance Loans - CashAdvanceUsa.net
Get A Cash Advance Payday Loan Here
Get A Cash Advance Payday Loan Here
Best Cash Advance Loans Make Priority Payoff Status
Best Cash Advance Loans Make Priority Payoff Status
Best Cash Advance Loans Weigh Out The Cost And Compare
Best Cash Advance Loans Weigh Out The Cost And Compare
No Telecheck Cash Advance Loans are the Best Option for
No Telecheck Cash Advance Loans are the Best Option for ...
Historic Photos 1939 Photo Rehabilitation Administration supervisor with farmer applying for loan. Ridgeway, Illinois Location: Crawford County, Illinois, Ridgeway
Home (Historic Photos)
  • 1939 Photo Rehabilitation Administration supervisor with farmer applying for loan. Ridgeway, Illinois Location: Crawford County, Illinois, Ridgeway
  • Photograph size: 8 x 10
  • Historic Photograph
  • Archival Quality Reproduction
  • Ready to Frame

Popular Q&A

avatar
Basic bank account for bad credit file i.e no credit checks?

Make sure he asks to open a BASIC account - not a full account. With a basic account some banks still do credit checks but others don't. Certainly try Co-op - they are generally very good. They even do basic accounts for bankrupts, & the only other bank doing that is Barclays.
He won't get a Post Office account - they are only for certain state benefits.
If he lives with you he probably doesn't have any utility or council tax bills to use as identity, but if he has a bad credit record he presumably has statements from credit or store card outfits, or something similar.

avatar
Does anyone know what banks let you open a basic account when you have bad credit? | Yahoo Answers

As far as i know they don't check your credit rating for a bank account? I got mine at 16 with no credit rating.. And could go into another bank today and make another account?