What Makes a Merchant Credit Card Advance Different From a Loan?

When Loanability first opened, we offered just one type of funding—a merchant credit card advance. These are direct merchant advances that are based on your business’ credit card sales. In practice, these function similarly to loans. It’s fairly straightforward: a merchant receives cash up front, and in return they sell us a specific amount of their future credit card receivables. With a traditional loan, the borrower owes a certain amount each month; with a merchant credit card advance, the merchant simply remits a percentage of their credit card sales until they’ve completed the agreement. While we’ve added a variety of other loan programs in recent years, many merchants still find that our merchant credit card advance program is right for them.

This type of receivables funding has several advantages. First of all, the remittance is directly based on your actual sales. If the business has a slow month, the remittance will be lower for that month. Unlike a fixed loan, you won’t just owe the same amount regardless of how the business is performing. Also, the remittance process is fully automated, so merchants don’t have to worry about making payments on time. All you have to do is operate as usual and the remittance will be made automatically through your credit card processor.

What sets Loanability apart from other companies offering merchant credit card advances? For starters, we offer the longest projected remittance times in the industry. A longer remittance period means you give up a lower percentage of credit card sales, which means that you can get funds up front without giving up a significant portion of your sales later on. The second advantage we offer is simple–we offer an extremely competitive money factors. At the end of the day, this is the single most important attribute, so we make sure to offer the best rates available. By keeping costs and retrieval rates low, we ensure that our merchants maximize their cash flow.

Merchant credit card advances offer a flexibility that traditional loans don’t. They adapt to how the business is performing, so a slow month won’t mean you have to miss a payment or face any penalties. If business takes off, even better–that just means you’ll complete your advance sooner. For some businesses, a traditional loan is what they need, so of course we’ll always have that option available for our merchants. For others, they’re looking for something more flexible, and that’s where the merchant credit card advance comes in. Regardless of which is right for you, we hope you’ll give us a call to go over what we can provide.