If your business processes a high volume of credit card transactions and you’re looking for a flexible way to borrow money, a credit card processing loan could be the perfect solution.
This financing option, also called a merchant cash advance (MCA), allows you to receive a lump sum of money upfront in exchange for a portion of your future credit card sales. Your payments are based on a percentage of your credit card revenue, which frees you from being stuck with a high fixed monthly payment during slow periods.
Credit card processing loan eligibility requirements tend to be more lenient than the requirements for a traditional business or personal loan. For some business owners, this can be a significant advantage, particularly if you’ve had trouble with your personal credit score in the past or you have a high amount of personal debt in relation to your current income. Below, you’ll find a quick overview of the basic requirements needed to qualify for a credit card processing loan.
How to Qualify for a Credit Card Processing Loan?
Business History
While it’s common for brand-new businesses to need funding, MCA providers typically require a business to have been open for a minimum amount of time before the owner can qualify for a credit card processing loan. For example, Zinch requires applicants to show proof that they have been in business for a minimum of six months.
Credit Card Revenue
To qualify for a credit card processing loan, ideally, you’ll want to have a significant portion of your daily revenues coming from credit card sales. Since this is the basis for the loan repayment, the lender will want to see that you’ll have enough consistent revenue to comfortably repay what you’ve borrowed within the required time. While provider requirements may vary, Zinch requires a minimum credit card revenue of $10,000 per month.
Pre-Qualification
If you’ve met the requirements above, there’s a good chance that you’ll qualify for a credit card processing loan. However, if you want to get an idea of how much you could qualify for, it’s a good idea to look for a lender, like Zinch, that will quickly prequalify you. In most cases, this only requires you to answer a few simple questions and does not create a “hard pull” on your credit card, meaning that checking your eligibility will not negatively impact your credit score. Taking the time to pre-qualify will help you determine whether an MCA might be right for your needs.
Documentation
When applying for a credit card processing loan, you’ll need to provide your basic contact information and information about your business. This would typically include details about the business structure, industry, incorporation or acquisition date, and whether you own or lease the property where your business operates.
Also, be prepared to provide the last four months of your business bank statements. If you’re able to provide these documents when you submit your application, it will speed up the approval process. However, if you don’t have them available immediately, a customer service representative can follow up with you to collect the statements. Depending on the MCA provider and your individual circumstances, you may need to submit additional documentation before your application is approved. However, in most cases, your bank statements will be sufficient.
A Note About Credit Scores
One of the advantages of a credit card processing loan is that you can qualify even if your personal credit score is less than perfect. While many providers, including Zinch, review an applicant’s credit score as part of the underwriting process, it’s not a primary factor in the approval decision. If you’ve had credit issues in the past, don’t make the mistake of assuming you won’t qualify for a credit card processing loan. The best way to find out for sure is to complete a pre-qualification form.
Apply for a Merchant Cash Advance Now
Now that you understand how to qualify for a credit card processing loan, you’ll be able to start exploring whether this might be a good option for your business. You can get started right now by completing our prequalification form, or contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
