5 Common Misconceptions About Merchant Cash Advances

March 1st, 2022


We’re Debunking 5 Common Myths About Merchant Cash Advances.

A Merchant Cash Advance is a great solution for small to medium sized business owners seeking fast funding. Here are the top 5 misconceptions we’ve heard about Merchant Cash Advances, and why they’re just not true.


  1. Getting a Merchant Cash Advance is too risky and will result in you losing your assets or business.

Absolutely not! The application process for a Merchant Cash Advance (MCA) does not involve collateral. Appling for an MCA is an entirely different process than applying for a loan. An MCA is the purchasing of your future receivables- which means that the amount of capital you’re seeking for your business is based on the overall health, and projection of revenues. When you apply for a Merchant Cash Advance with Velocity Group USA, your application is not processed through an automated system. Our team of underwriters give each application individualized attention to access what amount of money satisfies the business owners request, but also won’t over-extend their budget.


  1. A Merchant Cash Advance will damage your business’ credit score. 

Most merchant cash advance companies do not perform a hard credit pull to process your application. While there are some who will, the majority do not. Be sure to familiarize yourself with the application standards of the funder you are inquiring with so you’re not surprised by a hard credit pull. At Velocity Group USA hard credit pulls are never part of the application process, no matter how much money a business owner is seeking.


  1. The daily or weekly payments will increase over time.

Your payments on an MCA are determined through the final stages of the application process. They can be daily or weekly, and the amount you agree to pay will not fluctuate or change. For example, considering an applicant’s full financial picture is a a standard practice at Velocity Group USA. The underwriting team works hard to determine a comfortable daily or weekly payment to ensure that the business owner is not over-extended. They will also make sure the business owner is fully aware of the payment amount before signing they move forward with agreement.


  1. Like any other financial product, your credit score determines eligibility.

A large part of the appeal of a Merchant Cash Advance is the fact that credit is not heavily weighted in the process of determining how much money a business owner can receive. In fact, a high credit score isn’t required or expected. Velocity Group USA usually likes to see a minimum credit score around 550, but again the applicant’s entire application will be considered by the underwriting team, not just the credit score.


  1. You must work with a broker to get a Merchant Cash Advance.

If you want a broker to shop your application out to multiple funders for a broker fee, then you can absolutely go through a broker. However, keep in mind it is not at all necessary to use a broker, and you are free to apply direct to the funder. Doing so may save you time and money, since most brokers charge a fee for their services and are juggling multiple clients. Velocity Group USA welcomes business owners to apply directly through the online application.