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Merchant Cash Advance



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What is a Merchant Cash advance?

If you have heard that merchant cash advances are high interest business loans you would be right, but they aren’t necessarily always the wrong choice. If your company is in a strong position with plenty of assets and strong cash flow you might want to give this kind of loan a wide berth. In fact it’s always companies that are most able to get a loan which need the loan the least. Some companies choose to borrow cheaply though just to feed growth, and these kinds of companies with a strong balance sheet will likely not want to use a merchant cash advance lender.

However if your company is in a steep growth curve and good sales with few assets to show a lender then this loan may be right up your street. Why? Because instead of setting repayment dates in stone the lender takes a percentage of your top line directly from the credit card merchant before you even see the money.

When does a merchant loan work for you?

Whilst a lender taking money from your top line might sound brutal it does make sense in certain scenarios. If you sell a high margin product then you can probably spare some of that profit margin so long as the investments you make grow the business quickly. On the other hand if your products are low margin then you could even be digging a hole for yourself if you improve sales as you will have to repay the loan from savings rather than profit.
In essence you’ll want to think about merchant cash advances if:

  • Investment gives a very good rate of return.
  • You have a specific high growth project in mind with a known rate of return.
  • You have difficulty finding an investor.
  • You have good cash flow.
  • Your products have high margins.
  • You work with credit card receipts

You’ll probably want to avoid them in these cases:

  • You need money to survive. The interest rate will kill your business.
  • You cannot demonstrate how the investment will lead to supernormal profits.
  • Your business is not a growth business
  • You don’t take money primarily by credit card
  • You sell low margin products
  • You have no specific project in mind for the investment

How the numbers work

When we talk about loans we think in terms of annual interest rate. For example the simplest kind of loan uses simple interest. If I borrow $100 at 10% annual interest, one year from today I should pay the lender 10$ to cover my cost of the loan. At that point I might also choose to close out the loan and repay the $100 on the same day.

Interest gets a little more complicated if you make repayments during the year. In this case the lender needs to work out what was due on the date something was paid using a formula to break the annual interest rate down into days.

In the case of a merchant cash advance we cannot really think in annual terms. Just to be clear this example which follows is not using real world data. It’s just for fun:

Let’s say the lender grants you a $10,000 loan and he demands you repay $12,000. This “fix” is $2000 or 20% interest but it’s not spread over a year. The merchant might request to take 15% of your sales. If his share works out at $2,000 per month then the loan would be repaid in 6 months. That’s 40% annual interest right? Actually it’s not because you’ve been paying his money back each month so the amount of his money you were making use of was declining each day.

apr-calculatorIn actual fact you are paying an APR of 76%.

Advantages of merchant cash loans

Despite the high APR in the example above (in real life it’s likely to be lower), in some cases a merchant cash advance may be your only sensible option. Consider these tidbits:

  • Your company only needs to have a short credit card history (as little as 60 days).
  • Money is deducted at source making administration simpler for the borrower
  • Due diligence by the lender is usually prompt meaning you can have the loan in days
  • Lenders are usually quite flexible so long as the main criteria are met. It’s much easier than getting a loan from a new bank
  • Very often no security is required beyond a lien on your sales meaning that if the business fails the loan is extinguished without any further loss to the company.

Applying for merchant cash advance

Remember merchant cash advances are suitable for periods of fast growth and you should not rely on them for long term funding.

Fill out our simple common sense application form to get started. Things you commonly have to disclose for a business loan, like a business plan or resumes, customer references and so on are generally not required. Once you submit the form you will be put in touch directly with a lender who should contact you within a day or 2.

Approval rates tend to be high because credit history is less of an issue than it is for banks. If you are starting out this will be particularly important.

If your application gets approved you will be presented with clear terms and conditions which you should read carefully and understand before signing anything.

If you decide to continue with the process you will receive the finds in just a few days. Once your loan begins you will have a point of contact with the lender who will be able to explain at any time where you are in the loan process and who can also provide guidance if needed.


Green Touch offers Merchant Cash advances. If you think you are the right candidate for this kind of loan, apply today.


  • The applicant should be 18 years of age or older.
  • The business should already be taking credit card receipts of $5000 monthly for at least 2 months



Merchant cash advances are simple to understand, easy to apply for and do not require the borrower to have an outstanding credit history




These loans are popular because of the ease with which approval is made. But be aware that they are NOT for stagnant businesses. Read above for more information.



Who they are for

If your company is in a fast growth phase without a bank relationship and you need money for a profitable expansion these loans may be for you.




  • Fill the application form and supply any paperwork requested (the papers are very basic information)
  • Wait for a quick approval (even in hours)
  • Agree terms and sign
  • Set up credit card processing with the lender’s preferred processor
  • Receive your funds
  • Repayment is by automatic deduction



Green Touch Addresses

5050 Quorum Drive Dallas, Texas 75254
18851 NE 29th Avenue Aventura, FL 33180