What are credit card processing loans

Merchant Services Q&AWhat are credit card processing loans
Bankim Chandra Staff asked 1 week ago
1 Answers
Bankim Chandra Staff answered 1 week ago

Credit Card processing loans are also know as merchant cash advance.
Traditionally this kind of funding is known as MCA. Let us quickly understand what a Credit Card processing loan looks like. There are three parties involved in executing a Credit Card processing loan. A Merchant which is a business entity that it is interested in getting funding for Business expansion or any other business related activities. Credit card processor the entity that provides Credit Card processing merchant account to the business. A Lender or a funding organisations that is a licensed and shows interest in providing financial assistance on specific interest rates to the merchant.
Traditionally merchants used to contact the lender directly for funding. lending organisations only had the option of providing funding with limited security based on merchants good financial standing and credit report etc. Modern funding solutions like Credit Card Processing Loans for merchants are a bit different.
Here the lending organisation signs a three party agreement. These parties are as follows

  • Lender
  • The Merchant
  • The credit card processor.

The Merchant and the credit card processors agree to regularly send specific volume of funds to the lender on daily basis after settlement of daily transactions. The lending organisation and the merchant account provider may have their own business arrangement we are not going into that. Credit Card processing loans are extremely beneficial for merchants as they can start making part payment on everyday basis which helps businesses to overcome debt in a better way. For a lending organisation getting regular installment on daily basis through the merchant acquirer offers a better credit control.
let us know if you require funding solution for your business in the US European Union and India we will be happy to assist.