A merchant cash advance (MCA) can be an excellent way for small business owners to get the upfront cash they need to cover anything from operating expenses to emergency repairs or business investments. Knowing what to expect during the application process can help make it less stressful and give you the best chances for fast, easy approval. Here’s a look at six things you need to know as you go through the application process.
1. Plan to Sort Through a Sea of Lenders
When you first start looking into merchant cash advances, you may be surprised by the sheer volume of options. However, keep in mind that while many alternative lenders offer merchant cash advances, they are not all the same.
Before you submit a merchant cash advance application, take some time to compare several lenders. Look through their websites, check online reviews, and learn about the products they offer. You may also want to check their eligibility requirements, the expected timeline for funding, and whether they offer prequalification. Going through this process can help you find a reputable MCA lender that meets your needs.
2. Be Prepared to Provide Business Documentation
It’s often possible to prequalify for an MCA or submit an initial application online in just a few minutes. However, before giving final approval, the lender will want to see the documentation that backs up the information you’ve submitted.
Expect the lender to request items such as your business bank statements, credit card processing statements, and proof of identification. Understanding the merchant cash advance requirements before you get started can help ensure you have everything ready to submit. The faster you’re able to provide the necessary documents, the faster you can expect to get a response from the lender.
3. Expect to Discuss Your Credit Card Processor
Your merchant cash advance lender will require you to use an approved credit card processor, so expect to submit their information as part of your application process. If you have a good relationship with your current processor, it may be advantageous to seek out a lender that already works with them. Otherwise, understand that the MCA lender may require you to make a change before you can move forward with your merchant cash advance application. To avoid unexpected delays in the funding process, be sure to confirm this information during the initial research phase.
4. Consider the Expected Funding Timeline
Some companies, like Zinch, typically approve merchant cash advance applications within 24 hours and deposit the funds into your business bank account within 48 hours of approval. However, if you don’t specifically look for a lender that offers fast turn-around times, you may expect to wait a week or longer.
Each merchant cash advance lender has different timelines for funding loans. If you need the funds in a hurry, confirm the expected timeline with the lender before submitting your application. This can help you avoid unnecessary frustration.
5. Understand That You May Have Different Funding Options
It’s common for alternative lenders to offer multiple financing options, such as merchant cash advances, small business loans, and business lines of credit. If you’re working with a proactive lender, you may expect them to reach out to you to discuss your current financial situation and your funding needs. This can help ensure that an MCA is truly the best solution for you. If it’s not, the lender may suggest other products instead.
6. Don’t Forget to Carefully Review Your Contract
Before finalizing your merchant cash advance, the lender will provide you with a contract. Before signing the contract, review the details carefully, paying attention to things like fees, repayment terms, and potential penalties. If anything is unclear, don’t hesitate to ask the lender to explain.
You should expect the lender to be helpful and courteous during the contract review process. Some lenders, like Zinch, assign each borrower to a lending specialist who can answer all of your questions and ensure you’re comfortable with the agreement. If the lender does not want to answer your questions, this could be a cause for concern and may prompt you to take your business elsewhere.
Considering an MCA? Explore Your Options Today
Zinch offers fast, easy merchant cash advances to small business owners. We work directly with each borrower to ensure we clearly understand your business needs, so we can provide you with a custom-tailored solution. Contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
