How to Get Approved for a Merchant Cash Advance, Even if You've Been Declined in the Past
If your business wasn’t approved for a merchant cash advance, don’t worry; you’re not alone. Many merchant cash advance funders scrutinize applications very closely. They often consider your credit card sales, overall monthly sales amount, and other financial factors. If you don’t meet their requirements, you won’t be approved for a merchant cash advance.
Regardless, don’t let a denial letter get you down! No one likes getting rejected. However, there are steps you can take to increase your chances of getting approved for a future cash advance. In this post, we’ll explain how you can increase the likelihood of getting your next merchant cash advance application approved.
5 Ways to Get Approved for a Cash Advance Next Time
1. Ask the Funder Why You Were Rejected
Are you unsure of why your application was rejected? Go straight to the source and ask the merchant cash advance provider that you applied through. Many merchant cash advance companies will tell you why your application was rejected. Once you know what their concerns were, you may be able to address them when applying in the future.
When contacting the merchant cash advance provider, remain calm and professional. It’s tempting to take rejection personally. However, cash advance providers must run financially responsible operations, and there are certain risks they try to avoid. Once you understand their point of view, you may be able to reapply. At the very least, you can keep their concerns in mind when applying with other providers.
- Be polite, professional, and don’t take rejection personally.
- Ask for specifics, including what you could do to get your application approved in the future.
- Consider their concerns and take action, even if you plan on applying to a different funder.
2. Wait Until You Receive More Credit Card Payments
A merchant cash advance funder is essentially buying a portion of your future credit card sales for a set period. Due to this, funders examine your current and past credit card sales closely. So, if you aren’t currently making many credit card sales, it can be hard for a funder to provide you with a cash advance.
Even if you believe your credit card sales will increase soon, the funder will usually want to see that increase before providing funding. If you’ve recently opened your business, or just started accepting credit card payments, it may be best to wait until your credit card payment history is more established. Not only will you be more likely to be approved for a cash advance, but you may also receive a better offer.
- If credit card sales are currently low but are expected to rise in the future, it may be best to wait.
- Make it easy for customers to use credit cards. For example, don’t charge them extra fees for using a credit card and clearly display accepted payment types.
3. Double Check Your Application
We understand that as a business owner, you’re always on-the-go. Due to this, you might be more likely to make simple mistakes on your application, simply because you’re juggling so many tasks at once. Still, it’s important to pay attention to details when completing your application. Forgetting to include information or providing incorrect figures could cause you to get disqualified.
In some cases, the funder might catch the mistake and follow up with you to fix it. Other providers will use this as a reason to reject your application. Before submitting your application, take a few minutes to review it, and have either your partner or a trusted employee review it as well. By re-reading and correcting your answers, you could save your business from another rejection.
- Set aside some “quiet time” to review your cash advance application closely.
- Look at the numbers and personal information to ensure that it is correct.
4. Apply to Another Merchant Cash Advance Funder
Rejection isn’t the end of the world. In fact, you could view it as a positive learning experience. By learning why you were rejected and how you can improve your application, you’ll increase your chances of future success. If you’ve been rejected by one funder, that doesn’t mean that you should throw in the towel.
Instead, apply to a different cash advance provider. As you learn from your mistakes and more about the approval process, you’ll be able to improve your application. This will increase your chances of success.
- Apply to a different funder. They might have more lenient qualifications, making it easier for you to get approved.
- Learn from the past. What caused your application to previously be rejected? How can you address it so that you can get approved next time?
5. Weigh Your Options
A cash advance can be a great way to quickly get the cash injection your business needs. However, if you’re having trouble getting approved for a cash advance, consider alternative forms of funding. Small business loans, credit cards, lines of credit, and various other types of financial funding are available. Of course, it’s crucial that you research these financing products prior to applying.
In some cases, these other forms of funding will be better suited for your company. For example, let’s say your customers don’t use credit cards frequently for whatever reason. However, your sales receipts show strong performance. In this case, a small business loan may be more appropriate. Or, you might appreciate having a business credit card on-hand for purchases that you can quickly pay off within the month. Regardless, it’s important to determine the financing option that will best suit your business’s needs.
Ultimately, remember that rejection isn’t the end of the world. While merchant cash advances can be great sources of funding, but they aren’t the only source. If you’re set on this type of financing, make sure that you follow the tips in this post to increase your chances of getting approved next time!
Editor’s Note: This post was updated for accuracy and comprehensiveness in November 2018.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.