How is the business cash advance paid back?
Business Cash Advances are paid back by assigning a small, fixed percentage of each credit card processing settlement to the advance provider. This is done in one of three ways.
- We can facilitate a process known as "split funding", where you instruct your credit card processor to forward the agreed-upon percentage of each settlement to the cash advance provider each day. The remaining percentage of the settlement gets deposited to your business account as normal.
- We can set up a lockbox account. This is a third party bank account where 100% of your credit card sales are deposited from your credit card processor. It is a forwarding account that is set up to pay the agreed-upon percentage of each deposit to the cash advance provider and the remaining percentage to your business checking account. This method usually adds one day to the deposit delay from when you settle your transactions to when they deposit to your business checking account.
- We can set up a manual ACH program to debit your bank account based on the deposits that come in from your credit card processor. To qualify for this payback method, you will need to provide online access to your bank account so that they know when and how much to debit. They will manually login to your account, view the credit card volume and then debit the agreed upon percentage from your account.
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