TFS Blog

Merchant cash advance loans can infuse money into your business when you need immediate funding. They are a fast solution for organizations that need cash now based on future sales. Texas Funding Solutions provides companies with various loan options and resources to help them continue operations and remain successful.

What Is a Merchant Cash Advance?

Merchant cash advance loans are similar to paycheck advances for individuals. The main difference is that merchant advances are specifically for businesses. With a merchant cash advance, you can receive money in advance of sales that you anticipate in the future. Texas Funding Solutions' cash advance offers range from $20K to $1 million. Merchant advances provide flexible repayment terms that work around your needs, allowing you up to 18 months to pay off the balance. These loans don't have any industry restrictions. A cash advance can help you build up a new business until you get regular clients or assist in expanding an established business. Getting approved for a cash advance is often easier than a traditional loan. If you're considering applying for a merchant cash advance, here are three criteria you need to meet:

1. Be in Business for at Least Three Months

A merchant cash advance can help new businesses when they cannot get other funding. Since you only need a business history of three months, you can apply for one of these loans shortly after organizing your company. Your business can use the loaned money to buy equipment, develop a marketing strategy, and cover other business expenses. Other business loans can require you to have a history of at least a year or longer before you apply. 

2. Meet the Minimum Annual Revenue Requirement

At Texas Funding Solutions, our cash advance loans require applicants to have a minimum annual revenue of $250K. There isn't a required minimum profit amount to qualify, but businesses must provide evidence of regular income. You can prove this with current bank statements and tax returns. Applicants are not required to have real estate or other collateral for loan approval. The loan amount you qualify for is based solely on your annual revenue or sales from your business. 

Businesses with predictable revenue can qualify for revenue-based loans. This type of financing can benefit small and mid-sized companies that require loans on short notice. At Texas Funding Solutions, we offer flexible revenue-based business loans to help you quickly get the funding you need.

Ways To Use a Revenue-Based Business Loan

In a revenue-based loan agreement, the lender offers funds to a company in exchange for a percentage of the business’s revenue until the loan is repaid. Also known as cash flow-based lending, this financing is tied to your business’s gross revenue.

Here are four ways you can use the loan to scale your business:

Quick action lets companies make the most of opportunities that come along, but sometimes funding your needs can be tricky. Whether you want to expand your business or adjust to a sudden change in the market, revenue-based business loans can be a great way to secure extra capital.

What Are Revenue-based Loans?

Revenue-based business loans are an alternative type of loan that is growing in popularity. They are well suited to small- and mid-sized companies that need a loan on short notice.

As the name implies, revenue-based loans are tied to the business's gross revenue. The loan is repaid at a rate that scales with the borrower's gross revenue rather than having a fixed repayment scheme.

Revenue-based loans are regarded as a hybrid of the debt and equity lending models since they combine many of the best features of both. They let you preserve your control over your business without exposing it to the risks that come with other loan types.

Running a business requires regular cash flow and working capital. When sales are low, you can look for merchant cash advance loans to meet your demands. At Texas Funding Solutions, we offer cash advances against future sales of your business. Here are the four benefits of our merchant cash advance:

1. Quick Turnaround

Our cash advance loans have a quick turnaround of about 24 hours or less. If you need funds urgently, you can count on us to get the money within a day. For fast approval, you can present your identification, bank statements, and credit card processing statements.

A business bank account number and routing number are helpful for depositing funds. We can check your annual gross sales before approval. If you have a steady volume of credit card sales, we can approve your loan within a reasonable period.

2. Flexible Repayment Terms

We offer flexible repayment terms that are less likely to strain your business financially. We calculate payments based on the percentage of credit card sales. This payment method can be ideal if you operate a seasonal business. You can clear the advance quickly when the sales are significant.

Merchant cash advance loans and business loans are both financing options available for small business owners. There are several key differences between the two, each with its own benefits. At Texas Funding Solutions, we work to help business owners secure the finances they need to succeed. We can help you determine which type of loan would work best for your business.

Merchant Cash Advance

Merchant cash advance loans are lump sums of cash that a business receives in exchange for a percentage of its daily credit card sales. As Texas Funding Solutions provides the advance, we will assess the creditworthiness of the business and its potential for future sales. We use this information to determine the amount of the cash advance. These factors also determine the percentage of credit card sales that will be deducted until the advance is paid off.

The repayment process is automatic and based on daily credit card sales. This means that the repayment amount varies from day to day. With our easy, 1-page application and 24-hour approval period, a merchant cash advance may be the right option for you.

Business Loan

A business loan is a lump sum of cash that a business borrows. The business repays the amount, with interest, over a set period of time. We'll work with you to agree upon the terms of the loan in advance. This includes discussing terms such as the interest rate and repayment period.

Business loans are typically secured by collateral or a personal guarantee. We consider your business's credit score, cash flow, and financial history when deciding whether to approve the loan. Texas Funding Solutions has flexible terms, whatever your circumstance may be. There are no industry restrictions, and we can give you up to 18 months to repay the loan depending on your situation.