Chris Lodge

Background

About Chris Lodge

The Facts about Merchant Cash Advances Here's the way the merchant cash advance works. When a company gets a merchant cash advance, the deal is the purchase and sale of future credit card income. No regular fixed payments are required by the company. The lender collects a set percentage of the company's daily credit card sales. The collection continues until the lender recovers what they advanced to the company along with their premium. Usually, the lender tries to collect the advance within one year. One thing that is attractive to companies about the merchant cash advance is that, when they have a slow sales month, their payment to the advancing company is lower since they collect a set percentage of credit card sales. Another attractive feature is that there is no actual due date for the advance to be paid off. It is paid off when enough credit card sales are made for the advancing company to recover the advance and their premium. In addition, no collateral is required to secure the advance. As a result of tight bank credit, small business owners have had to turn to other sources of credit for their financing needs. Merchant cash advances have been one of these sources. A merchant cash advance is not a loan. It is a lump sum advance of money to the company against future credit card sales.