HOW IT WORKS

Traditional Bank Loans vs Merchant Cash Advances

Unlike traditional bank loans, Merchant Cash Advances are calculated and based on future credit/debit card receivables. MCA's are available for all types of businesses i.e., whether you are a brick-and-mortar or an online business as long as you accept plastic as a form of payment. Additionally, MCA's are a great alternative to the tedious process of those traditional bank loans that take up to 60 days to process. MCA's are easier to apply for (just a one-page application) and you will have an answer in 2 to 3 days. Often that same day!

How Does a Factor Rate Work?

A factor rate (or money factor) is a way of expressing the amount paid back to the funding company for the charges on a loan. Confusion can sometimes arise when comparing factor rates to interest rates or to an annual percentage rate (APR.)

​

The good news here is that a factor rate operates more simply than an interest rate. A factor rate is a percentage expressed as a decimal ranging from 1.1 to 1.9. This amount shows how much “extra” you will owe on a loan. For example: if you’ve taken out a short-term loan for $1,000 and your factor rate is 1.21, multiply the two numbers together to arrive at the “true” amount of money you’ll will pay back on the loan. (In this instance it’s $1,210.) Piece of cake.

​

What about Interest Rates and APR?

Unlike interest rates, which can compound as you pay off your loan and change as your debt decreases, your factor rate only applies to the original loan number. So, considering our example before, if you borrow $1,000 and the factor rate is 1.21, the factor rate will remain 1.21 until the debt is paid off completely. The factor rates doesn't change like interest rates.

​

So What Does the Factor Rate Mean to My Business?

It’s important to remember that when you consider your financial options. You should also recognize that the amount of the loan, your business’s credit history, how long you’ve been conducting business, and many other aspects of your situation can affect the factor rate on your loan. And obviously, the lower the factor rate, the better it is for you!

​

The next step in this simple process!

Just a one-page application to be filled out. Then emailed back to me signed along with 3 months of bank statements and 3 months of credit card statements. That's it! I'll have an answer for you in 1 to 2 days. Often that same day!

​

Click/Tap on the lemonade stand

For a downloadable document.