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Small businesses that require additional working capital have several options to get the financing they need. One option available to small businesses that make credit card sales is a cash advance.

Research Your Options

Before submitting any applications, do some homework and compare different cash advance companies. There are some simple things to consider when looking at different merchant cash advance companies.

Start by understanding the advance’s cost and the factor rate. When you have this information, you have a much better idea of determining the portion of your credit card sales you can utilize for your advance.

Find an Approved Credit Card Processor

If you already have a credit card processing company, ask them if they have any relationships with merchant funding companies. If you want to choose a specific business cash advance provider on your own, you can always switch credit card processing companies if needed.

Submit Your Application

A very nice feature of a cash advance is that the application process is far more straightforward than applying for a traditional bank loan. Companies with organized and accurate financial records will find applying for a merchant cash advance relatively easy.

Cash advance providers will want to look at your current business financial situation. This inspection can include your total income, the typical amount of credit card transactions, and any future performance projections.

Providers will also want to know information about your company’s structure and overall financial history. In some cases, a provider may also review your business’s credit score.

Take a Look at the Contract

Once you receive your financing approval, the cash advance provider will send you a financing contract. Any business owner needs to review these contracts in detail.

Pay close attention to the amount you will need to remit regularly. Also, take note of any penalties that may occur if you default on the requirements of a lender.

Make sure that if you have any questions or are unclear about any of the terms or conditions, you ask your provider for clarification. Your provider most certainly wants to make sure that you understand all the terms of your contract before signing up for an advance.

One of the best elements of a cash advance for a merchant is the simplicity of receiving this type of financing. Small businesses in need of quick capital should most certainly take advantage of this specific type of financing vehicle.