A merchant cash advance (MCA) provides business owners with an alternative to traditional financing options. Instead of a conventional loan, you receive an advance on future receivables, namely your debit and credit card sales. Typically, you repay a percentage of your daily or weekly sales until you have repaid the entire advance. If you’re considering this financing solution for your business, here are a few application tips.

Make Sure It’s the Right Solution for You

Before you start filling out applications, you should ensure that a merchant cash advance is right for your business. In general, MCAs work well for restaurants, retail businesses, and service businesses because they have many credit card transactions. If you don’t accept credit cards (or have very few credit card transactions), you’ll likely need to consider another form of financing.

Determine How You’ll Use the Funds

It will be helpful to figure out what you need the money for and how much it’ll cost. Maybe you want to expand your business, hire more employees, or invest in new marketing efforts. The lender will ultimately determine how much you’ll receive, but it can be beneficial for them to know what you’re planning.

Find Out Your Credit Score

While your credit isn’t the main factor that determines your eligibility, a lender will run your credit history to gain a better understanding of your overall financial health. Before you apply, check your credit score so that you know where you stand. If it’s lower than your chosen lender’s requirements, you’ll either need to select another lender or improve your score.

Have Your Most Recent Credit Card Statements in Order

An MCA is an advance on future credit card receivables. Your lender will need to see some of your most recent credit card statements. They need to see how much you’re bringing in each month so that they know you’ll be able to afford the advance.

Provide Additional Information Promptly

While the process of approving and funding an MCA doesn’t typically take that long, you should still be prompt in submitting your application and all supporting documentation. If the lender contacts you for more information, provide it as quickly as possible. The sooner you respond, the sooner you’ll have your answer and your money.

A merchant cash advance can provide you with the funds you need to run and grow your business. Like all other financing options, it has its benefits and drawbacks, so make sure it’s the right choice for you before you apply.