Merchant Capital Financing: Accessing Funds for Business Expansion

If your business is doing well, you might be thinking about expanding, which means you’re also thinking about how you’ll pay for the growth. Many options are available to business owners, and depending on your situation, merchant capital financing might be the right choice for you.

Merchant capital financing is also known as merchant cash financing and merchant cash advance. Regardless of the term, it has the highest approval rating (90%) among types of financing sought by small businesses, according to the 2023 Report on Employer Firms.

If you’ve never heard of merchant capital financing, you might wonder, “What is merchant capital financing?” This article will tell you more about this alternative type of business financing to help you understand one particularly beneficial choice you have for helping your company thrive.

What Is Merchant Capital Financing?

With merchant capital financing, a financing company provides business owners with working capital as a lump sum. In most cases, the money must be repaid through a percentage of the company’s future credit and debit card sales, plus a fee.

Typical financing amounts range from $5,000 to $500,000, and the funds can be deposited in your business bank account within 24 hours. Many business owners prefer merchant capital financing because it’s quick and easy and doesn’t impose monthly interest.

Repayment terms for these plans typically start at six months, but they can be extended depending on the specific case and the amount requested by the business.

How to Access Funds for Business Expansion

Applying for merchant capital financing through a merchant partner like The Payment HQ is simple. To qualify, you must have three full months of merchant card processing statements, plus three months of recent business checking statements.

Here’s what The Payment HQ requires for most online applications:

• Your company’s name
• Your full name
• Your phone number
• Your average monthly revenue
• The month and year of your company’s inception

Have your financial records and bank account information available when you apply. The financing company must verify your information and know where to send your funding.

Do Your Due Diligence

Merchant capital financing is a powerful lending option, especially for those who own seasonal businesses. That's because repayment is based on your card sales volume—not the fixed terms of the loan. So, if your business has a slow month, repayment is lower; if sales are higher, you expedite the repayment process.

However, merchant capital financing may not be the ideal fit for everyone, as repayment is typically taken from your daily merchant card sales, which could impact cash flow. Before moving forward, consider your goals and assess the repayment terms to ensure your business can meet the requirements.

See if Merchant Capital Financing Is Right for Your Business

Merchant capital financing through The Payment HQ is a simple, flexible way for you to keep your business growing. Have any questions or comments? Contact us now to get started on merchant capital financing.