Application Process for Business Merchant Loans

Need money for your business? Not later. Not when the stars are aligned. Now. Because opportunities don’t send out meeting requests.

The good news is that applying for a merchant loan for your business is a delightfully simple procedure compared to applying for a regular loan through the bank. There are no 47-page applications. There are no demands for your report card from the third grade. There are no philosophical inquiries into your five-year plan.

Here’s how your decision to apply changes to money landing in your bank account. Trust me, it’s much faster and easier than you think.

Step One: The Five-Minute Application

• The majority of merchant cash advance apps are online. You will provide basic information: your business name, the time you have been operating, your monthly earnings, and the reason for needing the advance. The most effective answers are simple and straightforward.
• You’ll also authorize a credit check as well as an examination of your business checking account. This isn't out of curiosity; it simply verifies that you're actually running and earning money as you report.     

Time involved: approximately 5-10 minutes if you have all your basics at hand. You're not writing a novel here but simply putting down facts that any entrepreneur knows in their sleep.

Step Two: Upload of Documents (Same Day)

After you apply, you will be asked for a supporting documents request. Typically required supporting documents are three to six months of your company’s bank statements, three to six months of credit card processing statements, a government-issued ID, formation papers (such as an LLC filing), and a blank company check.

So if you are organized, it takes 15-20 minutes to upload. Not so organized? Well, hours. 

Tip: Store them in a labeled folder so you’re prepared when the opportunity comes along.

Several lenders give instant initial approval to you based on your first application. You will read something like this: “Congratulations! You are pre-qualified to receive up to $50,000.” Not final approval, just a great indicator about being right on track.

Step Three: Underwriting Review (24-72 Hours)

• Here, the lender examines everything. They look at your processing volume to determine if everything is in order. They check your bank statements to see if there is any deposit activity. They check your credit history. They check everything.
• Underwriters will sometimes inquire about things such as "Can you tell me the story of this big deposit on the 15th?" or "What are your plans for the disbursement of these funds?" Quick answers are much appreciated.
• Usually, all apps are cleared through the underwriting procedure within a span of one to three business days. However, if the procedure is complex, it may take longer to complete, but apps that are

Step Four: The Offer(If Approved)

• If it gets okayed, the terms of the offer shall include the amount of the advance, factor rate (method of computing total repayment), hold-back percentage from the daily sales of cards, estimated time of repayment, and additional charges.
• Take the time to review it carefully. See what the total repayment package will be and how the daily holdback will work as far as cash flow is concerned. Don’t look beyond the page, at the terms and conditions that control the
• "If it looks funny or if you've got other offers on the table, this is your chance to negotiate," says Wakefield. "Ask them for better terms, lower holdbacks, or fewer fees. The worst thing they can do is say no," Wakefield says. Often they will say yes.

Step Five: Sign and Fund (1-3 Business Days)

• Agree to conditions and sign online. Just make sure that you are aware of what is expected of you, how and when repayments are to be made, and what might happen if circumstances alter.
• After signing the application, the funds will typically be available within 1 to 3 business days through direct deposit. Same-day and next-day funding options are available through some merchants for higher processing charges. For most standard transactions, the processing time is between two and three days.
• Then the money is transferred to your account for the intended purpose. The holdback is then initiated immediately, deducted from the processing of your cards.

Delays Causing Factors 

The biggest reason for delay lies with the applicant, not the provider. Incomplete LOD uploads, late responses from the applicant to the underwriter, ambiguous bank statements featuring the name of the business, and multiple applications through the same providers for the same product often lead to delay. Stay organized, respond promptly, and communicate clearly. This keeps your application moving at a fast pace. 

The Bottom Line 

The time it takes for the merchant loan, from application to funding, is approximately five to seven working days. This is much faster compared to a bank loan, which takes 60 to 90 working days, hence why merchants opt for merchant loans, though they are expensive. Speed, accessibility, and ease are important. When your business requires capital, having it within the week can make the difference. It’s simple stuff. The timeline’s not extensive. There’s no unreasonable demand for what you have to do. All you have to have is a real business and real revenue flowing in. Well, if that’s a description of you, you’re already close to being approved. The form is basically just making this official.