What is a Business Cash Advance, and how does it work?

With a business cash advance, First Merchants purchases a fixed amount of your future credit card sales in return for cash today. As part of your daily routine, you continue to accept credit card payments that are then reported to credit card processing companies as batches of transactions. The processing company then report to us the amount of money in batches that your business has processed.  We then use the Automated Clearing House (ACH) network to deduct your business’s bank account  in order to collect a small percentage of the credit card receipts.  This process is repeated daily over a period of several months until the full amount is collected. Since repayments are linked to credit card receivables, we will not get paid until the merchant gets paid thus helping the customer manage the cash flow of the business, especially useful during slower months.

There are no restrictions on the usage of merchant cash advances. Often times, our clients use these advances for expansion, purchasing equipment and inventory, remodeling, advertising programs, marketing, recruitment, payroll, consolidation, emergencies, and many other reasons. 

Other advantages to our business cash advances are:  
  • There are NO fixed monthly payments or amortization schedules
  • There are NO fixed time periods for repayments
  • There are NO pre-payment penalties
  • There are absolutely NO hidden costs or fees, such as Origination or UCC Filing fees
  • They do NOT require you to change your credit card processor

To see how a 
business cash advance differs from a traditional bank loan, click here