Business Term Loan
A lump sum, repaid on a fixed schedule
- Amount
- $20,000 to $1,000,000
- Cost
- Starting at 5.5%
Enclosure 8
Merchant Cash Advance
An advance on future sales, collected out of them
- Amount
- $5,000 to $500,000
- Term
- Follows the sales cycle
- Cost
- Factor rate 10% – 35%
- Funded in
- 24 – 48 hours
Enclosure 8 · Re
What a merchant cash advance is for
A merchant cash advance is an advance against the future sales of a business, collected by daily or weekly ACH out of those sales as they arrive. It is the option for a business with a less than ideal credit file that maintains healthy bank balances, and the approval rate is higher and the process faster than for a term or working capital loan.
It is built for a business that dips with the season or runs into a cash-flow problem for any reason, because what it takes moves with what comes in. A quiet week costs less and a busy one costs more.
It is bought at a discount rather than lent at a rate. The factor rate of 10% to 35% is not an interest rate and does not behave like one: the amount repayable is fixed when the advance is made, so clearing it early does not reduce it. That is the single most important line on this page.
— The funding desk
Worth asking
One question to put to any lender
Ask for the total repayable in dollars and the holdback percentage. The factor rate alone does not tell you either.
Enclosure 11
The application
At no cost and no obligation. Fifteen minutes, six screens, and one application that reaches every lender on the network and qualifies the business for all six programmes in this schedule.
Rather talk to somebody first? (800) 540-2119.
Enclosure 3 to 8
Where it sits among the six
Business Line of Credit
A limit to draw against, and nothing owed until you do
- Amount
- Up to $1,000,000
- Cost
- Starting at 4.5%
Short-Term Business Loan
The same shape as a term loan, over four to twenty-four months
- Amount
- $10,000 to $1,000,000
- Cost
- Beginning at 6%
Working Capital Loans
For the running of the business, not for a purchase
- Amount
- Up to $1,000,000
- Cost
- Starting at 4%
Equipment Financing
Secured on the thing it buys, over one to five years
- Amount
- Up to $250,000
- Cost
- As low as 8%
Merchant Cash Advance
An advance on future sales, collected out of them
- Amount
- $5,000 to $500,000
- Cost
- Factor rate 10% – 35%