Myth 5: Repayments are fixed in advance

Myth 5: Repayments are fixed in advance

Greenbox Capital® prides itself on providing responsible funding. We’ll never over-leverage your business, and we never engage in loan stacking. Your success is what matters most.

Debunked: Some lenders are predatory, but the majority are not. Reputable alternative lenders know that your success means their success, and they won’t engage in predatory behaviors like loan stacking.

Myth 4: MCAs are unregulated

The belief that MCAs are unregulated is false. MCAs are regulated, just under different regulations than traditional loans and lenders. Merchant cash advances are regulated at the state level and regulations vary from state to state. These regulations aren’t as strict as the federal laws that regulate banks and other traditional lenders, allowing alternative lenders to offer better terms and more flexible funding that is tailored to the unique needs of the business with less reliance on their credit score and financial history.

More regulation is being developed to ensure irresponsible funders are not taking advantage of business owners. Greenbox Capital is proud to provide only responsible, sustainable funding that is designed to help you grow your business. We won’t loan you more than you can manage, and we support the development of new regulations to protect business owners from predatory lenders.

To ensure you’re working with a trustworthy lender, seek out lenders that are part of a reputable association with good reviews on websites like the Better Business Bureau. Ask a lot of questions during the application process and only work with lenders that answer your questions clearly.

Debunked: Merchant cash advances are regulated at the state level, and more regulation is being developed to protect business owners.

With an MCA, your payments are not fixed. Instead, your payments will be based on a percentage of your daily or weekly credit card sales. On days or weeks with fewer sales, your payments will be smaller. On days or weeks with higher sales, your payments will be higher and your advance will be repaid faster.

Some business owners prefer the set monthly repayment schedule of a traditional term loan, while others find the smaller, more frequent automatic repayments of an MCA to be less of a strain on their cash flow.

Debunked: MCA repayments are not fixed. They’re based on a percentage of your daily or weekly credit card sales, and fluctuate based on how many transactions you process.

Myth 6: Merchant cash advances are only for businesses with low credit scores

While it’s true that MCAs have different approval requirements that are more favorable to businesses with lower credit scores, businesses with high credit and strong financial histories can still benefit from MCA funding.

Even businesses with strong credit and proven financial histories are often rejected by the SBA and other traditional lenders. If you do meet the stringent approval requirements of these lenders, many business owners appreciate the speed and flexibility of MCA funding, making MCAs a compelling option for all businesses regardless of credit score.

Debunked: MCAs provide working capital to all business owners, including those with low credit scores and those with strong financial histories.

Myth 7: MCAs are only for failing businesses

Failing businesses are less likely to be able to repay their advance, and there’s no advantage to lending to a business that isn’t able to repay their funding! To ensure you are able to repay your advance, most MCA providers, including Greenbox Capital, will stipulate a minimum monthly sales requirement and will often require proof that your business has met this minimum over a period of consecutive months.

While merchant cash advances can be used to shore up cash flow and manage unexpected expenses, they are best used to help fuel business growth or scale up rapidly. If an MCA can help you boost your marketing, purchase inventory in bulk for lower rates, acquire raw materials to pitch a big project, or support any other action that will help increase your revenue, you are more likely to successfully repay your advance on a faster timeline. A growing business is not a failing business!

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