Your customer experience of using the services of a merchant cash advance (MCA) provider such as EBC is designed to be simple: an easy to understand, user-friendly and convenient process.
That process is clearly explained here.
For merchants, as clients, this financial instrument makes good business sense on a practical, day-to-day operational level. It’s a quick, timely injection of capital allowing you to keep business ticking over and to expand.
But, once your business has signed up for a cash advance of this type, how is it treated for the record in accounting terms?
Here follows a typical example based on a cash advance lump sum of R100 000 as recognised in your ledger.
Note how this payback is based on an agreed percentage of your daily transactions or turnover (10% in this case), and is not a fixed monthly instalment.
Treatment of an MCA Deal in the Merchant’s Accounting Records
For further information, you and / or your accounting professional are welcome to contact us.