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The phrase indicates a cash advance loan on future credit and debit card swipes that small business owners can obtain from lenders. It is a comparatively recent source of finance for entrepreneurs. Although merchant cash advances have been accessible in the United States, Canada, and other industrialised countries for an extended period, they have only lately gained popularity in India as a quick and hassle-free technique of generating capital.

How Will It Work?

After you apply for and receive approval for an MCA, the lender offers you a flat payment. Automated debits subsequently repay the loan against the EDC machine from your credit or debit card sales. The payback time might be a minimum of 90 days or a maximum of 30 months, depending on the credit/debit card purchases.

The cash advance amount is determined by your typical monthly credit/debit card sales. Lenders offer credit card machine loans between 100% and 400% of your card sales volume. The lender will request your credit card sales statements for the previous three to six months to evaluate your eligibility.

Merchant Cash Advance Features

Numerous businesses in India, even small enterprises, accept credit or debit card payments. Essentially, a loan against a card swipe machine isn't a loan; instead, it is an advance payment from lenders.

You seek a lender for a merchant cash advance like a borrower. The lender considers your business’s typical monthly revenue generated via credit and debit cards and then lends you the appropriate amount. You may then repay the loan whenever you earn money from consumer credit, and debit card swipes.

Here are some features that loan against swipe machine provide to small businesses:

Simple, No-hassle Application

Unlike typical credit card terminal loans from banks, merchant cash advances are relatively simple to apply for. You can obtain your cash within a week with little paperwork and quick qualifying. Indifi, for example, offers same-day clearance.

Amounts up to Rs. 1 Crore

Traditional banks are not as lenient when it comes to swipe loan amounts—adding to it the masses of documents and evidence of credit score that you must present, which all add to the application's length. FlexiLoans, conversely, allows you to borrow up to Rs. 1 crore, based on your monthly card settlement and capacity to repay over 36 months.

Low Credit Scores Doesn't Matter

It is one of the most significant roadblocks faced by small enterprises. To qualify for bank loans, you require an excellent credit score. The qualifying requirements for merchant loans advanced at well-known online lending companies such as FlexiLoans are straightforward.

The following are the general prerequisites for eligibility:

• Only one year of operating experience
• Monthly Credit/Debit Card swipes of at least INR 20,000
• Monthly total sales from the business of at least INR 100,000
• At least six months' worth of credit/debit card swipes at your business
• Applicant must be aged above 21 years

No Collateral

Unlike traditional business cash advance loans, merchant cash advances do not need the submission of security such as real estate or other assets.

Rapid Funds Access

The great aspect of merchant cash advances is that you may obtain funds instantly without waiting for lengthy approval. Additionally, you may spend the funds received from merchant cash advances as you like because there are no limits on what you may or may not do.

While merchant advance loans are not appropriate for every company owner, they can be beneficial to some.

The Pros of Merchant Cash Advance

a. Flexible repayments

It depends on daily or weekly credit card sales for your company. The remittance mechanism is among the primary benefits of getting an MCA. A firm is obligated to make the specified payment with a standard term loan. This is regardless of whether its customers have paid their invoices or not.

This might hamper businesses that have late payers or variable financial flow. As previously stated, a loan against an EDC machine uses a proportion of your Businesses credit/debit card sales to pay off your loan. As a result, if you have a poor month of sales, you will not pay as much as you would during peak seasons.

b. Automated purchases are processed

When a POS loan is remitted, payments are deducted automatically from your company's accepted credit transactions. This eliminates the need for you to take time out of work to make the payments, and there is little risk of incurring late penalties. If you frequently fall behind on payments, it might be reassuring to know that your cash advance payment is being handled for you.

c. Funds are received expeditiously

When applying for merchant services loans with a bank, the procedure might take weeks or months to complete. If your firm needs immediate working capital, you generally cannot afford to go through a lengthy financing procedure just to discover that you are ineligible for a business loan. Funds are frequently available in less than a week with a loan against a POS machine, and many lenders like FlexiLoans may close disburse loan in less than 48 hours

c. No collateral is required

Even if you have assets, you may not be able or willing to pledge them as security for a company loan. With a merchant cash advance, lenders often request merely a portion of your business's projected sales revenues as security, which preserves the availability of all other corporate assets for those other uses as needed. FlexiLoans provides business loan without collateral.

While applying for a term loan used to be a long procedure, it has now been simplified and made entirely online. You are not forced to shop around for the best interest rate, nor are you forced to wait for clearance or the submission of documents.

All you need to use is a term loan application form and, while applying, it requires soft copies of your documents, a reliable internet connection, and a solid credit score. The entire process should take no more than a few business days, during which time you will see a reflection of the money that has been moved to your account. There are four methods to check term loan eligibility:

• Online Application: Log on to the FlexiLoans website and complete the application form by correctly filling in the relevant information. FlexiLoans will use these details to assess your eligibility for MCA.
• Upload the Required Documents Online: Ensure to upload all the required documents online, namely, KYC documents, current account bank statements, and business KYC documents.
• Credit Analysis: FlexiLoans will assess your business results and operations to calculate the loan amount you'll be eligible to borrow and the interest rates that will apply. Our loan officers will assist you in understanding the bid and making the right decision.
• Loan Disbursement: The loan agreement will be shared by FlexiLoans after verifying the documentation and approving the loan. The funds are disbursed to the applicant's account within 48 hours of signing the document.

FlexiLoans was started with an endeavor to solve the problems that small businesses face in accessing Quick, Flexible and Adequate funds for growing their businesses. Our vision is to give “Loans at a click”. We are the leaders in using technology and risk models that focus on alternate/surrogate methods for scoring customers.