1. Collect financial information.

Collect information about credit references, sales history and other relevant documents before you apply. Similar to a business factoring application, a cash advance application generally asks for specific information about credit card sales amounts, current financial information and business operation costs.

2. Apply.

Most cash advance providers offer online applications that can be completed in as little as an hour. Providers are generally more interested in your ability to operate your business reliably and pay back the loan than in your credit history, so often there is no credit check – just a request for recent credit card sales information and current business credit references. Providers will ask for information to help them determine repayment terms and advance amounts.

3. If you’re approved...

After you fill out the application, the provider will contact you with an approval or a request for more informat ion. Though approval can take as little as a few hours, the process typically takes up to a week. Your advance amount will be based on your current sales volume, operating costs and credit or debt obligations

4. Agree on terms and conditions.

Once you’re approved, the provider will draft a contract that specifies the terms of your agreement, such as the “safe retrieval rate,” or the percentage of daily credit card sales that can be set aside and used for repayment of the advance. The provider uses this am ount to determine the daily retrieval rate. The daily retrieval rate cannot be higher than the “safe” rate – the higher the amount set aside each day, the faster you’ll be able to repay the advance.

Any prospective agreement should address pre - payment – if you want to pay the advance off early – and default options. Typically, providers reserve the right to collect the full outstanding balance if payments are not made according to the agreement. Providers often place liens on business property, and in some cases, even force sale of business assets to collect unpaid amounts. Make sure you’re aware of all responsibilities before the advance agreement is finalized. 

5. Ensure merchant account compatibility.

Once terms are agreed upon, the provider will send you a contract and arrange to transfer the advance amount to your business. You will need to make sure the provider will have access to your merchant account in order to collect repayment. Some credit card processing companies charge additional fees for third part y access or do not allow third party transfers at all. If this is the case, you may need to switch to another merchant account provider. Make sure you consider any cost associated with switching providers in order to take the advance.