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02-26-2016, 11:11 AM #14
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- Join Date
- Sep 2012
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I tell merchants that there is no APR calculation because he's paying a flat fee for the funds. A merchant cash advance is repaid from a split of his future credit card receivables. The fee for the funds is represented in the form of a factor. The fee remains unchanged whether it takes him 6, 8, or 15 months to repay the advance; therefore, an APR calculation does not apply. And this is what makes a cash advance better than a bank product with an accruing interest rate.
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