A merchant cash advance or MCA provides fast working capital to small businesses. The funding is guaranteed by a businesses future receivables. A specified percentage of future credit card sales or a fixed daily payment will be assessed to repay the advance plus the finance fee. The advance provider will determine a reasonable advance and daily re-payment amount.
MCA's have recently gained popularity, this could be due to many factors including a fast application process and easy to understand terms. Many new advance providers are entering the market making much needed capital available to business owners. Additionally, Merchant Cash Advance programs allow business owners with bad credit to still obtain funding.
Second position merchant cash advances also referred to as "stacking" are becoming very popular with businesses who are seeking additional working capital. A second position advance allows a business to obtain additional funding on top of an existing working capital advance or loan. Second position advances are easily obtained by businesses who have recently received funding from a traditional cash advance provider.
Booming retail and online sales this holiday season are signs of increased consumer confidence in the economy. The increase in spending is forcing merchants to meet the demand by stocking up on inventory. The problem is that many merchants do not have the working capital or available credit to meet the increased demand. Unfortunately, this will put many businesses quickly out of inventory and out of business if they cannot keep up.
Many merchants have chosen to look into alternative forms of funding when big banks and credit card companies have failed them. Funding programs that are not available through big banks are often overlooked. Many small business owners would be surprised that funding programs are available!