Is the Revenued Business Card Better Than a Merchant Cash Advance?

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While you may have initially financed your company using personal funds or investments from friends and family, you will inevitably reach a point where institutional capital is needed to sustain your growth.

Two alternative financing options we will address below are the Revenued Business Card and the Merchant Cash Advance (MCA). While similar on the surface, one product clearly excels in flexibility and convenience.  

Before we decide whether the Revenued Business Card is better than a merchant cash advance, let’s take a look at both.

What Is an MCA?

An MCA is an alternative funding source. Unlike traditional bank financing, an MCA might work best for a business that needs quick access to money, often to fill in temporary revenue gaps.

By signing an agreement with an MCA provider, your business receives a lump sum payment that is paid for through a portion of future credit and debit sales. 

Applying for an MCA

While you don’t have to worry about your credit score to be approved for an MCA, underwriters do take revenue and other debt into account. You will have to scan and upload several months’ worth of bank statements, tax documents, landlord contact information, and other reference material.

The MCA’s underwriters analyze the provided records and may call you to request additional information. 

Receiving MCA Funds

When your business is approved for MCA financing, you will receive the particulars regarding your company’s qualification terms. This may include the associated factor rate, the payment period options, and the maximum advance amount. Once you agree to the terms and sign the contract, the funds are deposited as a lump sum into your business bank account.

How MCA Funds Are Paid For

Once the money is in your account, you can do with it what you want. To pay the MCA for your funds, you authorize your bank to daily debit the estimated amount agreed upon that is the percentage of the future revenues you sold. 

Included in your contract are the factor rate terms, which determine how much the cash advance will cost your business. Usually, the factor rate ranges from 1.1 to 1.5. The advance amount is multiplied by the factor rate to determine how much you will pay for the funds.

The holdback is tied to the rise and fall of the business’s revenue. Therefore, if you have no sales on a particular day, you have a right to ask for a true-up adjusting the payments downwards. When business picks up, you pay more. There are no savings for paying early.

For example, if you received a lump sum amount of $50,000, that money minus any fees is deposited into your account and your business is on the hook for that entire amount plus the factor rate. 

A Revenued Business Card works differently. 

What Is a Revenued Business Card + Flex Line?

The Revenued Business Card is a new alternative financing product that delivers your company access to short-term funds. These funds can be accessed with the Revenued Flex Line as a lump sum advance or when you use it for purchases. 

When you are approved for a Revenued Business Card, you have access to an adjustable spending limit, cash draws, a financial management portal, an app where you can view all of your spending activity, and more.

Revenued Flex Line

Together with every Revenued card comes a Revenued Flex Line. You can use the Flex Line to deposit cash directly into your account instead of using it as a card to swipe for purchases. Unlike a lump sum MCA you only pay for what you need when you need it. 

Applying for a Revenued Business Card

To apply for a Revenued Business Card, fill out the online application form. This is a straightforward process that can usually be completed all at once — paperwork- and phone call-free. 

Once you allow access to your bank account with Plaid, our automated technology can tell within seconds whether your company can qualify for a Revenued Card and can determine the spending limit we can authorize. 

Receiving a Revenued Business Card Spending Limit

After being approved for a Revenued Business Card, you will learn your spending limit, factor rate, and payment calendar. Once you agree to the terms and sign the contract, you will receive instructions on how to access your Revenued account through our online portal. You will also receive a physical card in the mail.  

The Revenued Card Difference

With the Revenued Business Card, you only pay for what you use. For example, rather than a $50,000 lump sum that you have to pay for no matter what, you have a $50,000 spending limit and you pay for what you use. 

The factor rate does not apply until you use the card and when it does, it only applies to the portion you use. If you spend $1,000, the factor rate is applied to that amount, not the entire $50,000. This could potentially save your business thousands of dollars.

The same applies to the Revenued Flex Line. There are no fees paid until you actually draw on your line and deposit cash into your account. 

And here is something you are really going to like. There are no upfront fees.  Unlike MCA where there are bank fees, underwriting fees, and broker fees the Revenued card charges no upfront fees. Those fees can add up to thousands of dollars on even a small size MCA. 

Merchant Cash Advance Stacking

With an MCA, the business receives the advance as one lump sum in their account and must start paying on it immediately. 

Many business owners have run into financial problems by “stacking” these lump sums when all they really want is to renew their advance early or get a little additional capital.  Sometimes owners are allowed to get two or three advances, depending on the MCA funding company. If they do this for multiple companies, it could put them out of business.

With the Revenued Card, there is no need for stacking. If you need additional capital, simply log into the associated merchant portal and request a limit increase. If your sales and banking history are strong enough to support an increase, you will be approved. You can do this for each of your multiple businesses. You can then use the increased spending limit for purchases or deposit cash from your increased Flex Line directly into your account. 

How the Revenued Business Card Is Paid Back

Each time you use the Revenued Card, it adds the purchase amount plus the applicable factor rate to your utilized balance. Daily payments are then taken out of your business bank account until your card’s balance reaches zero, according to your agreed-upon payment calendar.

Your business is responsible for maintaining enough money in your account to cover these payments. You should have a minimum average of $1,000 in your account at all times, with no more than three days of negative activity. Additionally, your company should do at least $10,000 per month in sales revenue to keep your Revenued Business Card. 

Enjoy Financial Transparency When You Use Your Revenued Card 

Use your Revenued Card for operational expenditures, payroll shortages, business expansion, and more. Use it the same way you would your debit or credit card. 

The amount you spend, along with your payment calendar, is available for viewing on your user-friendly merchant portal and associated app. Your spending limit, payment schedule, and more are always at your fingertips, giving you total financial transparency 24/7.

You can also use your portal access to request a cash draw and spending limit increase or view your rewards balance. 

Is the Revenued Business Card better than a Merchant Cash Advance? With all of the card benefits mentioned above, plus our first-rate customer service and support staff available to answer all of your questions, we think you’ll agree that it is better.

Learn more by filling out our online form or by calling (855) 943-5363.

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