What To Consider Before Taking Out A Fast Business Cash Advance

Every business owner will face moments where they need more funds than what they have at some point in time. What most of them do to solve such a problem is to take a term loan. While there’s nothing wrong about it, most loan providers require several weeks before coming up with a decision whether to approve or reject a particular application. That said, you probably have to wait long before you can get a hold of the funds that your business badly needs at the moment.

Another problem is that not every business owner is eligible for a loan. The struggle to find willing loan providers is real, especially for startup small to medium-sized businesses. They don’t have enough credentials yet for traditional lenders to see them as trustworthy to procure or borrow business funding.

If you’re one of those business owners who find it challenging to get approved for a business loan, a fast business cash advance is worth the try. Without a strict process for approval, it’s a quicker way to obtain the funding you need. 

This post will discuss fast business cash advance or merchant cash advance for you to understand how it works and what to consider before taking out one.

How Fast Business Cash Advance Works?

Fast business cash advance started as a quick loan option for businesses that rely heavily on debit and credit card sales for their revenue. Retail shops and restaurants are the ones that usually take out a merchant cash advance. The good thing about this loan option is that it’s now available to every entrepreneur. It doesn’t matter what line of business you are in, or if your revenue comes primarily from debit or credit card sales or not, you can now take out a merchant cash advance. So, what happens is that you’ll agree for a slice of your revenue in the future in exchange for an upfront sum of cash today.

You have two options as to the way you want the repayment of a fast business cash advance to get structured. You can either opt for a slice of your sales or go for the remittance of fixed debits from the bank, which can be either daily or weekly. The second option is more popularly known as Automated Clearing House or ACH withdrawals.

What Are The Benefits Of A Fast Business Cash Advance?

All financing options have some benefits to bring to the table. However, what makes merchant cash advance unique are the following:

  • There’s No Collateral – You don’t need to put your home or any other assets as collateral since fash business cash advance is unsecured. It lacks an absolute repayment term, so not being able to repay because of plunging sales is not much of a problem, at least on the borrower’s end. What the provider does to recoup the losses is require a personal guarantee. It’s an agreement that makes the borrower responsible for repaying the advance as soon as he/she is already capable. 
  • They’re Easy And Quick To Obtain – Without substantial paperwork required, getting the funds from a merchant cash advance will only take less than a week. They’re only going to review your application by looking at the daily credit card receipts of your business. Once they identify that you’re capable of repaying, you can obtain the much-needed cash immediately.
  • Repayments Adjust Based On Your Sales – Since fast business cash advance providers slice a percentage of your sales as repayment, the amount they get will depend on how your business performs in a specified period. 

What To Consider Before Taking Out A Fast Business Cash Advance?

A merchant cash advance can be a good deal for small business owners who need some funds now. However, before acting and taking out one, here are some things you should consider:

  • Do You Need The Funds Immediately Or Can You Wait It Out? – As already mentioned above, a fast business cash advance can release the upfront sum of cash within a week. The downside is that it can have a higher interest rate compared to other options out there, though alternatives like term loans can take a couple of weeks or more. Surely, you know that improving cash flow on time when the need to fix it arises is crucial for the success of your business. So, would you be willing to wait longer for a possibly lower interest rate or continue with a merchant cash advance to solve the problem immediately?
  • How’s Your Credit Score?  – If you have a solid history of creditworthiness, then you’ll find it more comfortable obtaining funds from traditional loan providers. However, what happens if you have a bad credit score? Chances are you’ll struggle to find a bank or lender who’s willing to lend cash for you. Most of them will only approve a borrower having an excellent revenue, with a business that already exists for several years, and an exemplary credit score. 

If you’re one of those facing the problem above, then a fast business cash advance can be a viable option for you. Credit score and other factors such as being in the business for quite some time already will not matter that much since repayments are going to take place based on your future sales. 

So, before taking out a merchant cash advance, look at your credit score first and ask yourself if you’re worthy of getting approved by traditional lenders or a provider of fast business cash advance loan is your best option.

  • Do You Prefer A Set Repayment Term Or Not? – Some people prefer a set repayment term, especially those who want to repay their loans faster. While others prefer not to have one so they can enjoy more flexibility, so ask yourself what works for you best. It’s essential since a fast business cash advance will only slice a portion of your sales from credit or debit cards as repayment. The amount to pay will also depend on your revenue. So, is that going to be an excellent deal for you or not?


Merchant cash advance or fast business cash advance may not work for everyone, but it certainly comes with perks. If you need immediate additional funding but don’t have a stellar credit score or other credentials to show your creditworthiness, it could be your best bet.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.