An ACH loan is one of the most imaginative items present in the alternative lending sector (sometimes called an ACH advance or cash flow loan).

ACH loans are a wide group of company loans that are unusual in the manner they are repaid. But let’s analyze how to apply for an ACH loan, what repayment looks like, and what the advantages are.

ACH Loan Benefits

The greatest advantage is that the process of submission and acceptance is normally very fast, and only takes individuals or companies a couple of days.

What’s more, bad credit is not a deal-breaker, 2+ years of credit history is not mandatory, and there is no collateral obligation, unlike the case for bank loans.

If the investor is satisfied that your company is sustainable and going in the right direction, your application will be approved.

ACH Repayment Terms

ACH stands for Automated Clearing House.

Much like when a deposit is automatically deducted from a bank account for a TV cable or electricity bill, the payoff balance of your ACH loan is automatically withdrawn on a specified date, which can be daily, weekly or monthly (depending on the terms and conditions of the loan agreement).

What’s more, the number is still set and consistent, which is vital because it ensures that as you handle the cash flow, you will not face any unpredictable and unwanted shocks.

How to Apply for an ACH Loan

A prospective lender can review the checking account statements of your company when you apply for an ACH loan (going back several months).

Why will this be done? Only to get a sense of the average daily closing balance, which lets them decide how much and for how long a loan can be extended to you.

Your ACH loan arrangement will include (among other details) the size of the loan, the duration, the interest rate, the repayment fee, and the amount that you will pay back on a monthly basis if you plan to go forward. That’s where an ACH loan’s “ACH part” comes back into the frame.