Applying for a business cash advance is a quick process. Usually, a business can have the advance amount deposited within a few days of submitting an application. If the provider offers online applications and approval, businesses can receive the advance in as little as a few hours.
Before you fill out a merchant cash advance application, you should gather any relevant business financial information. The application asks for information about credit card sales totals, monthly sales, profits, and revenues. Having this information close by before filling out the application will make the process much faster. The information you’ll need to provide will vary depending on the vendor, but generally expect the application itself to take anywhere from 30 minutes to an hour to fill out completely. Factoring applications are similar, and will depend on the provider.
Once you’ve completed and submitted your application, you’ll be contacted by a representative from the provider company. You may need to wait a few hours or even a few days to be contacted. You’ll either receive an approval and an advance amount (usually with a contract draft for you to sign) or a request for more information. Usually, providers are able to approve advance requests within 2 to 3 days. The service agreement will specify the repayment terms, the provider fee, and the safe retrieval rate for daily transaction transfers. If any of the terms seem unusually burdensome, now is the time to speak up if you wish to have them modified. Realistically evaluate if you’ll be able to operate your business without the additional sales funds.
You should also make sure that your current credit card processing system is able to handle daily transfers. If your merchant account doesn’t allow third party access or transfers, you might need to switch providers or switch merchant accounts. Several merchant account providers offer cash advances as a secondary service—it doesn’t hurt to check if your current account provider also offers this service. Make sure the provider will be able to make transfers. If you use a POS system to process transactions, you may need to run a few “test” transfers to make sure the system will work as planned.
During this stage in the process, you’ll sign a service agreement or contract with the provider. Make sure that the contract specifies important terms, such as the advance amount, provider fees, daily retrieval rate, and repayment schedule.