When it comes to short-term financing, businesses that rely on consumer sales and services have unique needs and hurdles. Their demand-driven business cycle tends to be seasonal and a lot of cash flow winds up back in inventory, so it can take a long time to build the reserves and margins necessary for traditional bank loans. Luckily, there are answers to financing your business assets by using products like a merchant cash advance.

An advance against your merchant account is what it sounds like, with fast approval times to match the product’s goal of supplying working capital to businesses like yours on short notice. Applications require proof of income generally and through the account as well as other basic identifying information about your business. If you’ve got questions, that’s pretty natural. Here are answers to three of the most common questions about this product.

  1. What Is the Payment Structure for a Merchant Cash Advance?

Payments are made monthly after the advance is distributed, but the payment changes each month. Instead of regular payments like term loans, the MCA has an interest rate and a holdback rate, with the latter being the percentage of the account’s income that goes to repay the advance. When your business booms, repayment goes faster. If it is slow, the required payments dip proportionally.

  1. How Important Is a Good Credit Rating When Applying?

MCAs do generally require a credit check alongside other criteria to make sure your company has healthy financials, but it is not the make-or-break factor that it tends to be for traditional bank loans. A good credit rating can save you money on financing charges or encourage the lender to make the advance bigger, but a bad one is generally not the reason for denial. It may be one of the reasons alongside other financial indicators of risk, though.

  1. How Long Do Applications and Approvals Take?

While the merchant cash advance was designed for quick approvals and cash distributions, it does take some time to accurately assess an applicant’s income, risk level, and the likelihood of repaying in a timely manner. Each lender is different, but you should expect it to take three to five business days to determine approvals, with cash in your account no more than two or three days after that in most instances.

Of course, some of the timing depends on how quickly your bank processes transfer requests and other digital transactions. It’s also worth noting that if you use this product regularly, approvals will go faster with lenders who already know your business. Keep that in mind when you apply.