What are the requirements for a merchant cash advance? If you’re considering a merchant cash advance (MCA) as a financing option for your business, it’s important to understand the typical requirements involved in securing this type of funding. While specific criteria may vary by lender or specific program, the following are the general requirements you can expect:
- Business Location: To qualify for an MCA, you must operate a registered business in Canada. This ensures that you are subject to Canadian regulations and financial guidelines.
- Operational History: We usually stipulate that your business has been in operation for a minimum period. Depending on the specific MCA program, this could range from 6 months to 1 year. This requirement helps assess the stability and operational viability of your business.
- Consistent Sales Volume: A vital criterion for MCA eligibility is the demonstration of a consistent volume of credit and debit card sales. We require businesses to show a minimum monthly sales figure, often around $10,000. This threshold indicates that your business generates sufficient revenue to support the repayment of the cash advance based on future sales projections.
- Business Bank Account: Having a dedicated business bank account is crucial for receiving the funds from the cash advance and for tracking sales and expenses. Lenders typically require access to your business banking information to assess cash flow and facilitate repayments.
- Financial Documentation: To evaluate your eligibility for an MCA, you’ll likely need to provide several financial documents. These often include:
- Bank Statements: Recent bank statements help lenders understand your financial health and cash flow patterns.
- Card Processing Statements: Documentation showing your credit and debit card sales will be used to verify your sales volume and assess your revenue consistency.
At Canada Business Loan Experts, we offer two main MCA programs, tailored to suit different business needs:
- Express Solution: This program is designed for first-time MCA borrowers who have been in operation for a minimum of 6 months. It provides a fast and straightforward funding option for businesses looking to access immediate cash flow.
- Fixed Funding Option: This alternative is intended for more established businesses that have been operating for at least 1 year. It caters to those who may require a larger cash advance due to greater cash flow needs or strategic investments.
If you’re interested in exploring your options for a merchant cash advance, we encourage you to contact us. Our team can discuss your specific situation, evaluate your eligibility, and help you choose the program that best suits your business financing needs. At Canada Business Loan Experts, we’re committed to providing flexible financing solutions that empower your business growth.
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