Revenue-Based Financing and Merchant Cash Advances
Fast capital repaid as a share of sales. Know the whole number first.
A revenue-based advance, or merchant cash advance, is the sale of a slice of your future receipts for cash today. The funder wires you $100,000 on Tuesday. You repay $130,000 through fixed debits from the business account, every business day or every week, until it is delivered. It is the fastest money available to a small business. It is also the most expensive, and the product this industry handles most carelessly.
We arrange advances from $5,000 to $2,000,000, with one rule that does not bend. You see the whole number before you sign: the amount, the total repayment, the size of each debit, how many there are, and every fee, on one page. If the business cannot carry the payment out of its current deposits, we say so and we do not place it. An advance that drowns the business is a bad deal for the business, for the funder, and for us.
How it works
- 1
The funder buys a fixed dollar amount of future receipts at a discount. The ratio between what you receive and what you repay is the factor rate. $100,000 received at a 1.30 factor means $130,000 repaid.
- 2
Repayment is a fixed debit each business day or each week, over three to eighteen months.
- 3
Offers come back the same business day. Funds are wired the same day with some partners, within one to three days with most.
- 4
Many funders discount the balance for early repayment. We negotiate for it and tell you whether the offer includes it.
Where it fits
- ●A time sensitive opportunity with a visible return: inventory at a discount, a contract that needs materials up front, a machine that will earn its cost back within months.
- ●Businesses with strong daily deposits but a short history, or an owner whose credit a bank will not consider.
- ●Bridging a known gap, such as a large receivable due in sixty days.
Where it does not
- ●Covering losses. An advance on a shrinking business makes the shrinking faster.
- ●Any business already carrying two positions. A third is what the industry calls stacking, and we will not do it.
- ●Anything repaid over years. A term loan or SBA loan costs a fraction as much.
What it typically costs
Factor rates in our network range from 1.15 to 1.45, depending on the risk and the term. On a six month term, a 1.25 factor is an annual rate well above 50 percent. We print the equivalent annual cost next to the factor rate so the offer can be compared with anything else on the table.
Origination fees of 1 to 5 percent come out of the funds. Some funders add underwriting, ACH or wire fees. Every one of them is listed on our offer page.
Enrichment Capital charges you nothing. We will not place a contract that contains a confession of judgment, and funders are told so in advance.
Ranges describe offers commonly seen through our network and are not a quote. Every offer we present shows its own amount, cost, term, payment schedule and total repayment before you sign.
Who usually qualifies
- ●Six months or more in business.
- ●Monthly deposits of $10,000 or more, at least five deposits a month, few returned items.
- ●No minimum owner credit with many funders. 500 and above widens the options considerably.
- ●A business checking account and three months of statements.
Questions owners ask
What is a factor rate?+
The multiplier between what you receive and what you repay. A $50,000 advance at a 1.30 factor repays $65,000. Unlike an interest rate, it does not fall as you repay, which is why the equivalent annual cost is so much higher than the factor suggests.
How fast can I get a merchant cash advance?+
Offers arrive the same business day. Funding is often the same day or the next, and within three business days with most funders.
Can I get an advance with bad credit?+
Often, yes. Funders look mainly at deposits and cash flow. Lower credit means a higher factor rate and a shorter term, which we explain before you decide.
What is stacking and why do you refuse it?+
Taking a new advance while others are still being repaid. Each added position takes a further share of the daily deposits until nothing is left for the business. We arrange a consolidation or a reverse consolidation instead, or advise waiting.
Is a revenue-based advance a loan?+
Legally it is a purchase of future receipts, not a loan, which is why factor rates are used instead of interest rates. Several states now require the equivalent annual cost to be disclosed. We disclose it everywhere.
Begin with a conversation
One application, a few minutes, your last three months of statements. A member of our team reads the file personally and tells you where you stand, usually within one business day.
Apply for financing