Selecting a merchant cash advance company for your business is a big financial decision requiring much thought and consideration. However, an even bigger decision is choosing a provider. Unfortunately, not all cash advance providers are created equal—some are going to offer you better rates and services than others. Consequently, if you don’t know what qualities a merchant cash advance company should possess, you could end up spending more money for mediocre services.
Here are four important characteristics to keep in mind:
1. Good rapport with existing clients
Reading reviews is a great way to learn more about how any company treats its clients. While you shouldn’t base your entire opinion on online reviews—as they can sometimes be misleading or few—they're good starting points. Speaking with an actual client is even better. This is why referrals are so valuable. If you know other business owners who recently received a merchant cash advance, find out if they are happy with the provider they chose.
2. Comprehension of the credit card processing industry
A merchant cash advance is not a loan, but an exchange of capital for your business’ future credit card sales, so it’s important the organization you work with understands the credit card processing industry. This will likely make the exchange go much smoother.
3. Clear application instructions
There are only so many hours in a day, and with everything else you have to do as a business owner, the last thing you want is to waste time filling out what seems like an endless application. The right firm will clearly explain what you need in order to apply for a merchant cash advance, and will walk you through the process, which should be straightforward, just in case you have any questions along the way.
4. Timely responses
One of the benefits of getting a merchant cash advance is the near-immediate access to funding it provides—sometimes within just one week. Some providers might give you a timeframe of when you’re likely to hear back from them, while others may be less responsive. This could indicate how well or how poorly a company communicates with its customers.
Interested in learning more? Find out exactly what merchant cash advance financing is and how it’s different from a traditional business loan.