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POS or Merchant Cash Advance 2022 : Features, Eligibility, Documents, Steps to Apply

POS loan facility is one best option to choose by the business owners in order to progress in the business with the best credit option available in POS. When compared with other available loans for business in the market, the Merchant Cash Advance (MCA) is more of an advance payment rather than a loan and it has many great advantages which include the high approval process rate.

 

Tax Benefit

Upto Rs. 46800

Tax Benefit

Upto Rs. 46800

Tax Benefit

Upto Rs. 46800

Apply for Business Loan

POS or Merchant Cash Advance




 

In India, a small number of enterprises have a tough time keeping the money necessary for their efficient operation and to carry out their varied operations. As the business owner must provide collateral and pay a high rate of interest; when a business loan is taken. To avoid such circumstances they choose other financing methods to avoid the lengthy paperwork necessary for the business’s further expansion.

 

POS loan facility is one best option to choose by the business owners in order to progress in the business with the best credit option available in POS. When compared with other available loans for business in the market, the Merchant Cash Advance (MCA) is more of an advance payment rather than a loan and it has many great advantages which include the high approval process rate which results in quick access to funding and even the payback terms are also flexible. Another attractive offering by Merchant Cash Advance (MCA) is that the loan amount offered is up to 1 Crores with a tenure of about 3 months to 2 years.

 

Merchant Cash Advance (MCA)

 

Merchant Cash Advance is the cash advance service that is provided to businesses generally to the small business entrepreneurs rather than loans where capital plays a vital role in the growth of the business. Merchant Cash Advance is a loan that is very flexible through which business owners can use credit or debit cards for the funds which are provided by the lenders. Many industrial countries such as the United States, Canada and so make use of the Merchant Cash Advance loan facility for many years whereas the Merchant Cash Advance loan facility has gained popularity lately in India. By opting for Merchant Cash Advance (MCA) loan business owners get their funding hassle-free and faster than compared to other financial loan systems.

 

Features of Merchant Cash Advance (MCA)

 



 

In India, many businesses irrespective of size, accept credit or debit card payments. So, the loan that is obtained with a credit or debit card swipe can be considered as the advance payment by the lenders in the Merchant Cash Advance loan. As a borrower looking for a lender for a merchant cash advance. The lender determines the right loan amount based on the predicted monthly revenue from credit and debit cards used by your company. The loan can then be repaid whenever you make money through debit card swipes and consumer credit.

 

Some of the best features of Merchant Cash Advance are as mentioned below:

 

Hassle-free Application: Unlike other business loans available in the market by the banks and lending institutions, Merchant Cash Advance is a quick, simple, and hassle-free process with minimum paperwork required. The funding can be obtained as soon as a week of time.

 

Funding Amount: Based on the business’s monthly revenue and capacity to repay the loan in 36 months of a time period, the maximum funding amount is provided to the business owners irrespective of CRS score, and heavy documentation.

 

Credit Score: In the Merchant Cash Advance loan system, a low credit score does not matter. As maintaining a good credit score is considered as a challenge in most small enterprises, the Merchant Cash Advance is typically the best option where credit scores do not matter.

 

No Collateral: In the Merchant Cash Advance loan process, there is no need to submit any security documents or the real estate and any other assets. Collateral documents play a vital role in other banks or lending institutes for business loans.

 

Quick Funding: There are no lengthy processes for approval as the funds are provided in a short span of time. The other major advantage of funding from Merchant Cash Advance is that the fund can be invested in any form irrespective of the loan purpose.

 

Eligibility criteria for Merchant Cash Advance (MCA)

 

There are a few factors that play a vital role in the eligibility of the Merchant Cash Advance loan. Merchant Cash Advance loan is provided to the business owners based on their business who fulfill the requirements as mentioned below:

 

Age of business: The age of the business is considered as the basic criteria to be fulfilled in order to get the Merchant Cash Advance loan. The age of the business from the date of registration must be of minimum 1 year.

 

Age of individual: The age of the business owner must be of minimum 21 years and a maximum of 60 years at the date of applying for the Merchant Cash Advance loan.

 

Type of business: Merchant Cash Advance loan is provided to the business which are corporations, private companies which are involved in trading, productions, and other services, limited liability partnership companies, and one person companies.

 

Sales: Monthly sales of the business are noted to promote the business with the Merchant Cash Advance loan. The sales of the business per month must be Rs. 1,00,000 which makes the business eligible.

 

Documents required to get the Merchant Cash Advance (MCA)



 

There are a few documentations required in order to opt for Merchant Cash Advance. Though the submission of a number of documents is less when compared to the other loan facilities providers where the paperwork required is more. Below are the required documents which need to be submitted in order to get the Merchant Cash Advance loan:

 

KYC: To know the customers, a few government proof identity card documents are to be submitted such as the PAN card, voter IDs, and Aadhar card. Any one of these can be submitted at the time of applying.

 

Address Proof: The documents which state the residential addresses of the applicant are to be submitted. For example, a Driving license, Passport copy, and ration card can be considered as address proofs and any one of them can be submitted at the time of applying for a Merchant Cash Advance loan.

Bank documents: Financial statements such as the last six month’s current account statements are to be submitted at the time of applying.

 

Steps to apply for Merchant Cash Advance (MCA)

 

To apply for the Merchant Cash Advance finance there is a procedure that needs to be followed in order to avail of the funding. Below are the steps to be followed when trying to apply for Merchant Cash Advance finance online:

 

Online Application: To get the Merchant Cash Advance finance, the applicant has to go to the portal website of the respective financing institution where Merchant Cash Advance is available. After logging in to the portal, the basic details of the applicant and the business details are to be filled in by the applicant. This process of filling out the details online will not take more than 5-10 minutes. The basic details are captured here so as to check the eligibility of the applicant for Merchant Cash Advance finance.

 

Upload Documents: In the second step after filling in the basic details, all the required documents need to be uploaded, the documents required are the KYC documents, address proof documents, and bank account details. Uploading required documents online is a simple ade quick process.

 

Credit Analysis: In this step, the authorities of the financial institution check the business revenues and operations based on the details and documents submitted in the previous steps. Depending on the results of the evaluation done, the loan amount that the business is eligible to borrow and the respective interest rates are decided.

 

Loan Sanction: In the last step, after all the documents are verified and approval of the application is done, the loan agreement is sent to the applicant from the financial institution. Once the agreement is signed, the loan amount is sanctioned to the applicant’s account within 48 hours of time from signing the agreed document.

 

Working process of Merchant Cash Advance (MCA)

 

Once the application is submitted and the approval of the loan is completed successfully, a loan agreement is sent to the applicant by the lender. After the agreement is signed, the loan amount is sanctioned to the applicant within 48 hours of time. Automated debits are made which will repay the loan amount of Merchant Cash Advance from credit or debit card sales. Depending on the credit card or debit card purchase, the repayment time is from a minimum of 90 days to a maximum of 3 months period. The Merchant Cash Advance is determined by the monthly sale by the credit card or debit card. The Merchant Cash Advance lenders offer cash amounts based on the volume of the credit card sales. The offered amount can be of range from 100% to 400%. Before offering the cash advance, in order to check the eligibility, the Merchant Cash Advance lenders ask for the credit card sales statements from the last three to six months.

 

Benefits of choosing Merchant Cash Advance (MCA)

 

Merchant Cash Advance finance has many advantages and benefits for the businesses in helping the growth, operations, and profits. Some of the basic benefits of business caused by the Merchant Cash Advance finance are as mentioned below:

 

Flexible repayment: As the Merchant Cash Advance finance depends on the credit card sale of the business on a monthly or weekly bases. This term loan deduction helps the businesses which have late paying customers or businesses which has variable financial flow. As the loan amount is deducted based on the sales by the credit or debit card; if the business has poor month sales the amount is deducted less depending on the sale quotient.

 

Automated purchases: This is an advantage for the business owners; as if the POS loan is canceled the loan amount is automatically deducted from the business’s approved credit transaction. With this automatic deduction of the loan amount, there is no risk of penalties. If one forgets to make the payment for the loan amount, the loan deduction is already handled in Merchant Cash Advance finance.

 

Funds received efficiently: When applying for Merchant Cash Advance finance, the process of application and approval is completed within 48 hrs of time and the loan amount is sanctioned. The process is fast when compared to the conventional merchant services in the market, where the banks require a lot of paperwork and are time taking processes with high loan rejection rates are involved. Thus, Merchant Cash Advance finance makes the process of loan sanctioning simple, quick, and efficient.

 

No collateral required: In Merchant Cash Advance finance, there is no need to submit security of any asset in order to receive the loan amount. Generally, submission of assets as security is not entertained by the business owners, here for applying Merchant Cash Advance finance there is no requirement of property or real estate assets to be submitted as the security. Few financial institutes take some percentage of the business sales revenue as an asset which is a better option than submitting the company’s assets.

 

To know more details on SME loans from Cholamandalam. You can email contact@startupyo.com or call at  +918886666821.




Faq's

There are many major benefits of taking Merchant Cash Advance finance, one of which is the loan process is simple, quick, efficient and one need not worry about the repayment of the amount as the amount is deducted automatically

Overdraft: Rs 5.00 lacs: The Overdraft will be subject to monthly reduction in Drawing Power so that Drawing Power becomes NIL in 72 months

The Card Swipe Machine loan or POS loan is where the business owners who run their businesses offline and accept credit/debit card payments through POS terminal or through barcode transaction, then the loan amount to that business is sanctioned based on the monthly average card sale transactions.

As Merchant Cash Advance finance is an unsecured business loan, the need for collateral documents for the security of the loan is not required.

The basic documents required to avail the Merchant Cash Advance finance are the KYC documents of the applicant and Business documents, Address proof documents, and Financial documents which include bank statements from the past six months.

The Merchant Cash Advance finance can be used by the business owners for many purposes such as for carrying out operations effectively, for the renovation of business place, for capital expenditure, for maintaining marketing costs, for expansion of business, for equipment repair or update and so on.

The Merchant Cash Advance finance is best suited for businesses whose transactions are carried out digitally via credit or debit cards through terminals.

Merchant Cash Advance finance is the best choice for business owners who struggle for getting a loan and who can not afford to wait for many weeks/months to get the loan. As Merchant Cash Advance finance takes only 48 hours of time to sanction the loan amount with a simple and quick process

The main advantage of taking Merchant Cash Advance finance over a bank loan is that; the process of loan is quick, simple, and efficient in Merchant Cash Advance finance when compared to conventional bank loans. In Merchant Cash Advance finance business plan is not asked, payback is based on the monthly revenue of the card sales, and no collateral is required which is in contrast to the bank loan system.