The need for emergency cash flow can happen to any business from time to time.

And with the current credit crunch happening across the country with many banks reluctant to loan you the capital you need, what can you do?

Well, used wisely a merchant cash advance can put badly needed dollars in your pocket in a hurry.

If you know what to ask before signing up for a merchant cash advance.

So what is a merchant account cash advance?

As the name implies, cash advances happen when a merchant cash advance company offers you a lump sum amount in exchange for a portion of your future sales.

What that means is that a company will give you cash in hand today, to be repaid from a percentage of your daily (or monthly) sales volume down the road.

So how do you know if you qualify?

Though requirements may vary among merchant cash advance providers, a good rule of thumb is:

1. if you already accept credit cards
2. have solid monthly sales volume
3. process Visa and/or MasterCard transactions greater than $5,000 per month, and
4. you have been in business for more than 6 months (though I’ve seen anywhere from 4 to 9 months)

than a merchant account cash advance may be right for you.

The next question you might be asking is…

So what’s the catch?

Key Merchant Account Cash Advance Questions

As you can well imagine, there are some important points to consider before signing up for a merchant cash advance.

For starters, it is important to remember that a merchant account cash advance is not a loan.  And this difference will have an impact on your finances, particularly your taxes.

Cash advances are treated differently than a business loan, and thus will effect your taxes differently (from a tax deduction standpoint). Before making any business decision it is always a good idea to consult with your CPA or other tax advisor.

Additionally, you’ll want to ask a number of questions regarding how the cash advance works, what the rates are, and how the repayment terms will affect your daily cash flow.

A short list of questions to get you started are:

1. Will I need to switch credit card processing companies?
2. What are the repayment terms (timeframe, percentage of sales)?
3. Once I am in repayment, can I change my credit card processing to another merchant account provider?

Once you’ve gotten that out of the way, the final step is…

Choosing a Merchant Account Cash Advance Provider

Would you like to get matched to qualified providers today?

If so, there are a couple of ways you can get started.

You can request a merchant account cash advance rate quote.  Simply follow the link and fill out the short form and we will contact qualified merchant cash advance providers for you.

If you are looking for a new merchant account, you can follow the link and find your state listed on the page.

Or you can request merchant account quotes and let us connect you with qualified merchant service providers that can help you get set up starting today.

Comments?  Questions?  Other merchant account issue you’d like to share?

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