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laraleal
Level 1

Accounting for Merchant Cash Advances

My business got a Square merchant cash advance, the amount we received in the checking was 60000, but there was a fee of 7800. So 67800 is the total repayment amount. How is this best recorded? I've read as a liability and then the fee is "prepaid" which doesn't make sense to me. Ive also read that a merchant cash advance is not a loan, or liability in any way. So it shouldn't be received as one and you can only deduct the payments to the fee for tax purposes. I'm hoping someone knows exactly what to do for it. Thank you so much! 

1 Comment 1
NumbersByNelson
Level 3

Accounting for Merchant Cash Advances

Did you ever get answers?  I have the same question.  Thanks!

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