Merchant Cash Advances for Auto Repair Shops and Gas Stations in Lexington, SC: Read This First

Revenue-based financing collects a share of a business's total monthly revenue, wherever it comes from, until an agreed amount is collected. A merchant cash advance looks only at card sales. An insurance agency paid by carrier commissions has little card volume, so an advance built on card batches may not fit it; a revenue-based arrangement reads bank deposits instead. Contracts differ, so the agency should read how each one defines revenue and what happens when income drops.

Plenty of agencies here are one-person offices, which makes the revenue question personal: Nonemployer Statistics put 378 insurance agencies and brokerages with nobody on payroll in Lexington County, SC for 2024 (NAICS 52421).

Think of the holdback as a fixed slice: a set percentage of every day's card sales goes to the provider, and that continues until the agreed total is in. A higher holdback collects the total sooner, and leaves less of each day's sales in the restaurant's account.

Illustration only, invented figures: a counter-service restaurant averages $3,200 a day in card sales, and the holdback is 12%. The provider keeps $384 of an average day; on a slower day it keeps less, because the share stays the same.

Counter-service kitchens make up a large field locally, at 264 limited-service restaurants on a payroll in Lexington County, SC in 2023 (County Business Patterns, NAICS 722513), and each one has its own card volume to show a provider.

A factor is a multiplier set in the offer. The advance times the factor gives the provider's full take; take the advance back out of that and what is left is the cost. Time does not change it: the total is the same whether it is collected in four months or eight.

Illustration only, invented figures: a contractor takes a $25,000 advance at a factor of 1.34. With $33,500 going back to the provider, $8,500 of that is the price of the money. With $2,100 of daily card sales and a 15% holdback, $315 goes to the provider on an average day, and the total is collected in about 107 business days.

Plug an offer into the calculator on this page (advance amount, factor from the offer, holdback share, average daily card sales) and it answers with three results: how much is remitted in all, what the advance costs, and roughly how many business days remitting takes.

A line of credit charges interest on the drawn balance for the days it is out, so paying it back early saves interest. An advance costs the same total however soon it is collected. For a shop that qualifies for both, the line can cost less; the advance is built on card sales rather than on a partner's credit review of the whole business.

Illustration only, invented figures: draw the same $25,000 from a credit line at a 14% annual rate instead, and carry the balance for 150 days. The interest comes to about $1,438.36; the factor example on this page priced the advance at $8,500. The line of credit page covers how a limit is reviewed.

1. The station shares several months of card processing statements with a provider.
2. Back comes an offer with three numbers: the advance, the factor and the holdback.
3. If the owner accepts, the provider pays the advance.
4. Each day, the holdback share of the station's card sales, fuel and store alike, goes to the provider.
5. The advance ends when the agreed total has been collected.

ZIP Code Business Patterns listed 23 gasoline stations at a ZIP 29072 address in 2023 (NAICS 4471).

In an MCA, the factor rate is the number that sets the price: an advance times the factor equals the total collected. It is written as a decimal, such as 1.28, not as a percentage, and it is not an annual rate, so it cannot be compared directly with a loan's rate.

Illustration only, invented figures: an $18,000 advance at a factor of 1.28 means $23,040 collected from card sales, a cost of $5,040.

Restaurant counts in County Business Patterns for 2023 put 246 full-service and 264 limited-service restaurants with paid employees in Lexington County, SC (NAICS 722511 and 722513).