In today’s ever-changing market, speed and flexibility are crucial for small businesses on a growth trajectory. Considering scaling up is the #1 obstacle successful small businesses face, the resources with which to do so are of the utmost importance. While traditional small business loans are more well-known than alternative finance options, they offer little in the way of speed, flexibility and ease. Financing through a bank often takes weeks or even months to close, is asset-intensive and often requires a mountain of business documents during the underwriting process. For merchants focused on running their businesses, which are often light on assets, traditional financing is simply not an option in many cases.
A revenue advance (or merchant cash advance) is a funding option gaining popularity because it is much quicker and easier for small business owners to obtain. The amount a business qualifies for is tied to the revenue it is generating, rather than the assets in its possession. Other factors come into play during the underwriting process, including time in business, industry type and credit score (to a lesser extent), but all things considered, a revenue advance can be an ideal fit for small businesses that might otherwise have trouble qualifying for funding. Moreover, the speed with which alternative lenders like MobyCap can close deals — in a matter of hours or days — is invaluable to small business owners who need to take advantage of sudden opportunities for purchasing inventory, marketing, expanding or hiring staff, to name a few.
How Do Revenue Advances Work?
MobyCap can provide up to $5M in funding — which sets us apart from virtually all other private lenders — and can fund within one business day in many cases. Rather than requiring repayment within a fixed timeframe, revenue advances simply deduct a small percentage of the business’ future sales until the agreed amount is fully repaid. This allows businesses to secure necessary funding quickly and easily without hindering growth in the present. It also affords seasonal businesses with additional flexibility, as they won’t be tied to a high interest rate during slower months. Lastly, we can also include prepayment incentives for merchants who wish to pay off their balances early.
*MobyCap is not providing funding to new/startup companies at this time. We require a business to be operational for at least one year and generating at least $50k per month in order to do so.
Frequently Asked Questions:
A merchant cash advance is an alternative to business loans that — rather than tying the merchant to a hefty interest rate — simply deducts a small percentage future sales until the debt is repaid.
First and foremost, merchant cash advances take a small percentage of future revenue until the debt is repaid, rather than tying the business to a high interest rate over a period of time. MCAs are also much quicker and easier to apply for than small business loans, allowing the merchant to focus on growth in the present.
Rather than an interest rate, MCAs attach a fixed cost of capital to the borrowed amount that is related to the state of the business. MobyCap works directly with each client to ensure they receive the most competitive rates available to them every time.