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What is a Merchant Cash Advance?

2M7’s merchant cash advance is designed to meet the financial needs of Canadian small businesses. It enables you to use a small percentage of future sales to access the working capital that you need, today. 2M7 Financial Solutions provides a simple borrowing and repayment experience that prioritizes maintaining a positive business cash flow.

We provide up to 125% of your average monthly sales, which can be deposited into your account as soon as the same day!

For example, if your business generates $25,000 in monthly sales, your business would be eligible for up to $31,250 in business funding through a merchant cash advance.

With our Split Program, a “withholding percentage” would be automatically deducted from your daily transactions until your advance is fully repaid.

No interest. No hidden fees. And your repayments are based directly on your sales.

How a Merchant Cash Advance Works

Unlike traditional loans, a merchant cash advance gives your business flexibility because payments are based directly on your sales performance – which means that we only get paid when you get paid.

With 2M7’s Merchant Cash Advance “Split Program”, the repayment process is simple: each day we automatically collect a small percentage of your sales until the full amount is paid back.

The amount repaid each day is known as the withholding percentage, and this percentage is the most important number in determining if this type of business cash advance financing is right for your company.

Withholding percentages can range from 4% -30% of your daily sales, and depends on a variety of factors including the cash advance amount, as well as your revenue, industry, and more.

NOTE: The withholding percentage should not be confused with an interest rate. It is the amount of your daily sales that gets collected and put towards repaying your financing.

Unlike a traditional business loan, there is no interest rate on a merchant cash advance. Instead, there is a one-time fee that’s added to your cash advance that’s based on the value of your future sales.

This one-time fee is determined by a factor rate, which is a multiplier of the amount of funding you receive. This factor rate typically ranges between 1.18 – 1.48.

Your cash advance amount is multiplied by the factor rate to determine the total amount that must be paid back. For example, if you’re approved for $25,000 in financing at a factor rate of 1.30, you’ll need to pay back a total of $32,500 ($25,000 X 1.30 = $32,500).

The factor rate is determined by our propriety algorithm, and is based on a wide variety of details, including your industry, location, years in business, number of employees, amount of funds being provided, and more.

As a merchant cash advance lender, we create a unique internal credit score for your business that’s unrelated to the credit scores used by traditional lenders such as banks. Instead, we use a proprietary algorithm to evaluate risk and determine credit worthiness in a way that is specifically designed to meet the financing needs of small and medium businesses in Canada. This score is then used to determine the factor rate for your business cash advance.

The longer we work with your business and the more we understand your particular needs, the more funding we will be able to provide and the lower the factor rate will be. This is why business cash advances are one of the best options for small and medium business financing.

There is a significant difference between factor rates and interest rates – most notably that a factor rate determines the one-time fee added to your cash advance, which reflects the cost of borrowing.

While interest rates are calculated on an annualized basis, the factor rate simply determines a fixed fee that is added to your total repayment amount. And since payments are interest-free and based directly on your sales performance, this makes merchant cash advances the ideal business funding option for maintaining a positive cash flow.

The application process for a business cash advance is simple and you can be approved in as little as a few hours – with funds deposited directly into your bank account within 24-48 hours.

Unlike a business loan from a bank, applying for a merchant cash advance only requires providing a few basic documents, which include:

  • A government-issued photo ID
  • Your merchant ID number
  • Recent bank statements
  • A void cheque for the business bank account where your cash advance will be deposited

 

Once your application is approved:

  • We will deposit the merchant cash advance directly into your bank account.
  • We will connect directly with your payment processor to set up payments. 2M7 Financial Solutions works with most major payment processors in Canada, and the process is completely seamless and transparent.
  • You will be able to monitor and manage your repayments online through your 2M7 account.

 

To discuss your business financing options or start your application process, please fill out the form here.

How Do We Differ

NO INTEREST

NO FIXED PAYMENTS

NO ACCRUING INTEREST

NO APPLICATION FEES

NO DOWN PAYMENT

NO LATE FEES

Quick overview of a merchant cash advance

A merchant cash advance is a set amount of business funding, determined by your existing credit/debit card payments.

Once your business is approved for a merchant cash advance, a percentage (known as a withholding) will be determined by our proprietary algorithm. This percentage can range anywhere from 4% – 30% of your daily sales and is determined by a variety of factors. This withholding percentage can vary based on whether your sales are higher or lower than normal, in order to ensure you don’t pay more than you can afford.

MCA

Why Choose a Merchant Cash Advance

The application process for a merchant cash advance is quick and simple, and the funds are deposited directly into your bank account within 24-48 hours. Moreover, it does not affect your credit score, and the flexible repayment plan makes it ideal for maintaining a positive cash flow.

As the business owner, you have the freedom to choose exactly how you want to use your business financing. Typically, 2M7 clients use their business cash advances towards operations such as:

CASH FLOW

Get liquidity to cover expenses

EQUIPMENT

Buy, upgrade or repair equipment

INVENTORY

Buy stock and increase inventory

RENOVATIONS

Fix or redesign your facility

EXPANSION

Purchase a new location

STAFFING

Hire employees to help you grow

MARKETING

Run advertising and promotions

DEBT CONSOLIDATION

Consolidate or pay off debt

DEVELOPMENT

Expand your product line

ASSETS

Invest in vehicles and machinery

With a 97% approval rate, 2M7 Financial Solutions is a leading lender for Canadian small and medium businesses, helping companies secure quick and easy financing. Unlike other lenders, our merchant cash advance specialists are committed to the success of our clients’ businesses and work alongside them to support their growth.

To discover how a business cash advance can help your business, call to speak with one of our specialists today.

Does My Business Qualify?

In order to qualify for funding, your business needs to meet the following minimum requirements:

IN OPERATION FOR A MINIMUM OF 90 DAYS

ACCEPT CREDIT/DEBIT CARDS (MINIMUM OF $10,000/MONTH)

LOCATED IN CANADA (EXCL. QUEBEC)

NO OPEN BANKRUPTCIES (PERSONAL OR COMMERCIAL)

Speak to a specialist today!

Speak to one of our trained specialists to better understand what options we have for your business.

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