ACH Loan

An ACH (automated clearing house) loan is a short-term business loan that allows a company to access capital quickly but is often accompanied by high interest fees. ACH loans are sometimes called working capital loans or cash flow loans.

With an ACH loan, a business owner receives a lump sum of money from the lender. To repay the loan, automatic payments are withdrawn from the business’s bank account via ACH transfers. ACH loans are often confused with merchant cash advances, but the primary difference between the two lies in the form of repayment. With merchant cash advances, repayment is made through a percentage of the borrower’s future credit card transactions; however, ACH loans are repaid via automatic daily or weekly payments from the borrower’s bank account(s).

An ACH loan calculator can help small business owners who are considering taking out an ACH advance to boost cash flow.