Compare Merchant Cash Advance Prices BUYERS GUIDE 2017
What to Look for in a Merchant Cash Advances For Business
When your business needs a business cash advance, you should expect for it to cost you anywhere from between $1000 to $10,000, of course that’s depending on the size of the advance that you require. Typically speaking, the price you pay is assessed as a percentage of the advance that you need. The amount that you qualify for will be based off your verified sales record. This is how the companies assess how much you can afford to pay back at their rates, which cost anywhere from 20% to 45% of the initial loan.
When shopping for a business cash advance, the first thing to look for is always the lowest possible rates. Any business can get into a crunch and need cash flow to keep things operational, but a cash advance is a costly way to try and keep your head above water. Every percentage point lower is worth a great deal to you over the long run. Also, try to find a provider that has the lowest administration or service fees possible.
Compare Business Business Cash Advance Rates
Flexible repayment options are a key factor to consider when shopping for a business cash advance. These loans are paid back by the merchant keeping a percentage of all of your daily sales until the loan is cleared. However, some programs are more flexible than others when it comes to repayment. Usually, providers keep from between 15% to 25% of all your sales until you have repaid the advance. However, the best plans will be flexible in this regard, allowing you to pay more or less based on your cash flow. This allows you to clear your loan as soon as possible, without getting behind on your payments.
Finally, you should do business with lenders who are open and transparent about their fees and rates. This is a very high-interest lending model, and as a result certain providers try to keep quiet about just how high their rates are. If a company won’t disclose up front how much it costs to do business with them, it should make you consider alternative financing options.
What You Can Expect to Pay for Your Business Cash Advance
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Taking a $10,000 advance as an example, it would be reasonable to pay anywhere from $2000 to $4500 in order to obtain the loan. As it is a high interest business, a $2000 fee for a $10,000 loan would certainly be considered one of the better available rates. Keep an eye out for surcharges or transaction fees that may be tacked on top of these base rates, as they can quickly inflate your overall costs.
Merchant Cash Advance Sample Costs
Below are a few examples of prices for Merchant Cash Advances which will give you an idea how much you will pay for your purchase.
- $5,000 Typical Minimal Advance Amount
- $500,000 average maximum advance
- Repayment Cost generally is between 11% to 29%
- $5,000 to $14,000 average amount of monthly credit card sales needed to qualify
- Hold Back Rate is usually 10% to 20%
Common Considerations on Business Loans:
- Repayment Rates
- Prepayment Discounts
- Origination Fee Rate
- Personal Guarantee Requirements
- Required Documents For Funding
- Daily Fixed Percentages