How an advance works, in plain terms
A merchant cash advance provides money up front in exchange for a share of future sales, paid back through regular deductions, often daily or weekly. It is not a traditional loan with a fixed term, and the cost is often expressed differently from an interest rate. That difference is why you should always ask for the total amount you will repay.
Who it tends to fit
Elk Grove is a growing suburb, and many businesses here take card payments daily: restaurants, salons, retail stores, auto services, medical offices. Those businesses have a constant stream of deposits, which is the thing an advance is sized against. A business with deposits that are large, frequent and reasonably steady can handle deductions that move with sales.
It fits poorly for a business with long invoice cycles. A contractor who is paid in two large payments a month has no daily deposit to deduct from, and the arrangement can strain the account.
Questions that protect you
- What is the total repayment amount, in dollars?
- How often is it deducted, and from which account?
- Does the deduction change if my sales fall, or is it fixed?
- What happens if I want to repay early?
- Do I have another advance, and how would this one stack on top of it?
The last question matters most. Stacking advances is how a manageable payment becomes an unmanageable one. If you already carry one, read about MCA relief first.
An illustration of deduction mechanics
For illustration only, an Elk Grove salon taking $2,000 a day in card sales with a fixed $400 daily deduction pays out 20% of sales on a typical day, but 40% on a day when only $1,000 comes in. Where the deduction is a percentage of sales instead, it falls as sales fall. Which structure applies depends on the offer, so read it. These figures are examples, not our terms.
Our side of it
We consider FICO 500 and above, review about three months of business bank statements, require no tax returns and use a soft credit pull on a five-minute application. Funding runs $25,000 to $5,000,000, and funding can arrive in as little as 24 hours. Sole proprietors can apply. If you want a product that repays on a schedule, look at term loans or a line of credit. If you want repayment that tracks sales, compare revenue-based financing. Ready? Apply here.