We get this question a lot, and for good reason. They sound the same. The truth is, they are very similar, with one major difference…..
A Merchant Cash Advance is when a company basically fronts you money for sales/revenue that you are expecting to realize in the future. They calculate everything based on your monthly credit card sales. So, if you’re averaging $50,000 in credit card sales per month, then you can receive a percentage of that $50,000 NOW and you’ll pay it back over time. The way that this gets paid back is literally right from those same credit card sales. Instead of you receiving 100% of your deposits, a percentage of every sale will go directly to pay back your Merchant Cash Advance. This is a good solution for retail, restaurants, etc.
A Business Cash Advance is essentially the same thing, except this is for businesses who may not accept credit cards, or do very little of their overall sales via credit cards. Instead of paying back the amount through your credit card sales, you will be paying it back by a daily ACH payment directly from your business bank account.
That’s literally the only difference. Have more questions? Reach out to us! We can help you!