"Merchant Cash Advances Making Good Decisions in Tough Times"
Operating a successful business requires working capital and regular cash flow. When money is tight, business owners often consider alternative sources of funding when more conventional sources are less available. One of the riskier and more dangerous funding options is the merchant cash advance (MCA). MCAs alleviate short-term cash needs, but often leave the merchant with a long-term financial crisis.
An MCA allows a business to obtain immediate funding against future receivables. Similar to a consumer pay day loans, the business is selling future revenue for cash today. Most MCAs are repaid within six to twelve months.
The repayment of the advance, plus fees and possibly other charges, is made by either: (1) a set percentage "holdback" from daily or weekly credit card receipts, or (2) an automated clearing house (ACH) withdraw from the business bank account in a fixed daily or weekly sum.