Merchant Cash Advance services are utilized by merchants with a need to augment their cash flow and/or develop a new source of working capital. In this context, a cash advance is a factoring product in which a merchant needing additional cash flow sells a portion of its future card receivables at a discount. Merchants are advanced a percentage of their average monthly card processing volume, and pay back the advance daily as a percentage of their net credit card processing.
The Challenge and The Solution-
Small businesses face an increasing challenge in obtaining loans to fund their ongoing operations. Many small businesses have been forced to turn to commercial credit cards to finance their day-to-day operations, a very high-cost financing option. Our Merchant Cash Advance service provides our merchants with a cost-effective, convenient alternative to access the working capital they need to sustain and grow their business. Merchant Cash Advance purchases a set dollar amount of the merchant’s future credit and debit card receivables at a discount; in exchange the merchant receives cash. A specified percentage of the merchant’s daily credit card deposits are then remitted to repay the cash advance.
Commonly asked questions about Merchant Cash Advance Services:
- How does the cash advance program work? Once a merchant has been approved and funded for a cash advance, a specified percentage of the merchant’s daily credit card deposits are then remitted to repay the cash advance.
- How long does it take to get approved? Once the merchant has sent back the signed application and all required documents, RPS will communicate a decision to them within 24-48 hours. Funding typically occurs within 3-5 days of receipt of all required documents.
- Why should I choose a cash advance as a way to obtain cash flow? In today’s economy, it is very difficult to obtain a traditional loan through your bank. And if you are approved, you are then required to provide financial items related to tax returns, personal financial statements, pay stubs, etc. The cash advance process is a quick and simple application process.
- How will the merchant know if they qualify? Once RPS receives the signed application and required documentation, underwriting will review and make a final decision. If approved, the merchant typically receives their funds within 3-5 business days. Merchants who apply but are not approved will be notified that they did not qualify for a cash advance.
- How are payments made? Payments are extracted from the merchant’s daily credit card deposits (typically up to 20%). Retrieval percentage is based on total gross volume and specific credit card processing volumes.
- How long is the term of the cash advance? These programs are paid back in 4 to 6 months.
- What can I use a merchant cash advance for? The uses of your advance are virtually unlimited, including:
- Inventory replenishment
- Equipment upgrade
- Website development
- Any business investment
Please contact RPS with any questions as we look forward to providing quality customer service and long-term value to our relationships. You can reach our sales department at (877) 777-0696