FICO Score Requirements for Merchant Cash Advances

Merchant cash advances are a growing industry that provides an alternative to lending. The merchant cash advances requirement list is a lot smaller than what you can find at a bank. This industry provides much needed cash flow to those that cannot secure loans and regular lending institutions. Since the industry is still relatively young, many people do not know about it fully. What does it take to get one of these loans and how do they work? Here are a few things to consider about merchant cash advances.


Merchant cash advance companies make sure that they do not refer to their service as lending. Therefore, they are not bound by the same restrictions that the banking industry faces. They do not care what your FICO score is and they do not have any restrictions on how much they can charge you either. The main thing that you have to demonstrate is that your business has a successful history of credit card transactions.

How They Work

Merchant cash advances follow a certain protocol. A merchant cash advance comes in and discusses terms with you, then sets your credit card machine up to pay them back with each transaction. You get a lump sum of money in upfront and then you repay the cash advance company with a certain percentage of sales until the debt is repaid. On top of the debt, the company usually charges a fee that works out to as much as 200% interest.

Benefits for Companies

Seeing how much interest companies are charged may scare off some potential business owners. However, there are a few benefits of this service as well. Most people who use merchant cash advances have already tried to get a line of credit at a bank or take out a loan. Due to their poor credit, the bank turned them down. Merchant cash advances can provide money to these same businesses where banks have failed to do so. It allows people with bad credit access to the money they need to do business.

Another added benefit of merchant cash advances is that they have flexible terms. You do not have a monthly payment or set repayment schedule as with a typical loan. You only pay them back with each credit card transaction. Therefore, they get their money when business is good for you. In down times for your business, they do not ask for a dime. This makes it convenient for businesses that have sporadic months where no income is coming in.