Merchant Cash Advance at Old National Bank

A Merchant Cash Advance (MCA) at Old National Bank provides fast, flexible working capital designed for small and mid-sized businesses that need immediate access to funds. Unlike a conventional bank loan, a merchant cash advance is repaid as a percentage of future card sales or through fixed daily or weekly ACH transfers. This product is intended to help businesses manage seasonal fluctuations, cover short-term operational expenses, purchase inventory, invest in marketing, or bridge cash flow gaps while waiting for receivables.

Key Features

• Fast funding: Expedited underwriting and streamlined documentation for quicker access to capital compared with many traditional loan products.
• Flexible repayment: Payments are tied to sales volume, so repayment amounts adjust with your business performance.
• No collateral required: Many MCA arrangements are unsecured and based primarily on future sales rather than fixed assets.
• Simple eligibility: Qualification often depends on consistent card or electronic sales history rather than perfect credit scores.
• Custom advance sizes: Advances are structured to meet short-term working capital needs, with amounts based on average monthly sales and business performance.

How It Works

The Merchant Cash Advance process typically follows these steps:

1. Application: You provide recent bank statements, card processing statements, and business information to demonstrate sales history.
2. Offer and terms: Old National Bank evaluates your cash flow and extends an advance offer that includes the purchase amount, holdback percentage (or fixed ACH schedule), and total repayment amount.
3. Funding: Once you accept, funds are deposited into your business account—often within a short window depending on documentation and underwriting.
4. Repayment: Repayment is made automatically through a fixed percentage of daily or weekly card sales or via scheduled ACH withdrawals until the advance is repaid in full.

Benefits for Businesses

• Speed: Faster access to capital compared with many traditional loans, enabling rapid response to opportunities or emergencies.
• Predictable cash flow alignment: Repayments flex with sales volume, which can reduce strain during slower periods.
• Simplified underwriting: Focus on sales performance rather than long credit histories or extensive collateral.
• Operational freedom: Provides funds that can be used for a wide range of business purposes—payroll, inventory, equipment, marketing, and more.

Who Is It For?

Merchant Cash Advance is a suitable option for businesses that:

• Have regular credit/debit card or electronic sales.
• Need short-term capital quickly and prefer repayments that reflect real-time sales performance.
• May not qualify for traditional term loans due to limited credit history or past credit events.
• Require flexible payback that adjusts with seasonal or cyclical revenue.

Costs and Considerations

An MCA differs from a standard loan: rather than interest and APR, the cost is typically expressed as a factor rate or a total repayment amount. Factor rates and fees vary based on business risk, sales volume, and advance size. Before accepting an offer, review the following carefully:

• Total repayment amount: Understand the full amount you will pay back and how it compares to the advance size.
• Repayment method: Confirm whether repayment will be a percentage of card sales or fixed ACH withdrawals and how that will affect daily cash flow.
• Holdback percentage: If repayments are taken as a portion of card sales, know the percentage withheld and how fluctuations in sales will impact cash on hand.
• Fees and penalties: Verify any origination fees, administrative fees, prepayment terms, or late payment penalties.

Example (Hypothetical)

This example is illustrative and does not reflect a guarantee of terms. Imagine a business receives a $50,000 advance with a factor rate that results in a $60,000 total repayment. If repayments are structured as 10% of daily card sales, the daily payment will vary with receipts; higher sales days mean larger payments and faster payoff, while lower sales days slow repayment.

Eligibility and Documentation

Typical requirements for consideration include:

• Proof of consistent card or electronic sales for recent months.
• Business bank statements to verify cash flow patterns.
• Basic business information such as entity name, tax ID, and contact details.
• Some MCA options may request a minimum time in business or minimum monthly revenue threshold.

Comparing MCA to Traditional Financing

Merchant Cash Advance differs from term loans or lines of credit in a few key ways:

• Repayment linkage: MCA repayments are linked to sales, while loans have fixed scheduled payments.
• Speed vs. cost: MCAs often provide faster funding but can be more expensive than a well-qualified bank loan over the same period.
• Underwriting: MCAs emphasize revenue history; traditional loans focus more on creditworthiness and collateral.

Frequently Asked Questions

Will a Merchant Cash Advance impact my credit?

MCA providers typically focus on business cash flow and may not require personal credit checks in all cases, but terms vary. Some arrangements may involve credit inquiries or personal guarantees.

Can I pay off an MCA early?

Early repayment terms differ by agreement. Some advances include prepayment options without penalty, while others have fixed purchase structures or fees for early payoff. Review your agreement carefully.

What happens if sales drop?

Because many MCAs base repayments on a percentage of sales, payments will typically decrease as sales decline, helping protect cash flow during slow periods. Fixed ACH repayment structures may not offer this flexibility.

Choosing the Right Option

When evaluating Merchant Cash Advance alternatives, consider the cost of capital, the fit with your sales cycle, and the projected impact on daily cash flow. Compare offers not only on headline numbers but on the full repayment amount, payment structure, and any fees or restrictions. Speak with a representative to understand how an MCA integrates with your broader financing strategy.

Final Notes

A Merchant Cash Advance at Old National Bank can be a practical solution for businesses requiring quick, flexible funding aligned with sales performance. Terms, pricing, and eligibility vary; all advances are subject to approval and documentation. Carefully review all terms and consider consulting a financial advisor to determine if an MCA is the best fit for your business needs.

Address Bank: Chicago, Illinois Evansville, Indiana, U.S.
Bank: Old National Bank
Headquarters: Evansville, Indiana
Products: Business Financing
Type: Merchant Cash Advance