Benefits Of Merchant Cash Advance(MCA) For Seasonal Businesses – ZeroPointFinance zeropointfinance.com

Though MCA is an interest-free financing option, MCA lenders charge a fixed one-time fee. The total lending amount is multiplied by a factor rate, which is often between 1.1 to 1.7, to get the payable amount. However, the holdback percentage, which is mostly between 10 to 20% of the borrower’s credit card sales, decides the daily or weekly repayment amounts. With no fixed term or repayment date, the repayment amount entirely depends on the regular cash flow of the business. For example, the payment amount will be more on days the company experiences exorbitant sales and less on the slow business days. The lenders collect the daily amount directly from the credit and debit card sales of the borrowers. However, the repayment term is often 18 months.