Merchant Blog

Blog Article: Merchant Advance vs. Business Loan [VIDEO]

Our newest Merchant Advance Loans 101 Video is now live over at the Youtube channel for your viewing pleasure. This week, Merchant Advance CEO David Gens takes a look at the differences that separate merchant advance funding from traditional business loan products. The video is below: click through for a full transcript of David’s thoughts.

Q: Is a Merchant Advance a Type of Business Loan?

A Merchant Advance is not a loan, a Merchant Advance is a purchase of future debit and credit card sales for a price today. A loan involves fixed payments and we offer both products. In a loan there’s fixed payments and it’s time based. You know how long it’s going to take to repay and there’s an interest rate. With a Merchant Advance there’s no fixed payments it’s a percentage of your sales, so as you process more sales the payments increase and if you process less sales the payments decrease. Those are the main differences between the two products: some people prefer one over the other, so if you’re a very seasonal business, for example the winter months are slow and the summer months are higher, a Merchant Advance is a great way to not take too much risk with a fixed payment and a loan and only pay us when you’re making the sale, and are able to afford to pay us.


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