Expansion Capital Group Business Loans and Merchant Cash Advance
Borrowing money is often thought of as a very standardized process. We imagine a person walking into a bank or other lending institution with a proposal for how much they would like to borrow. We then picture the lender pulling a credit report on this prospective borrower in order to learn more about their credit-worthiness and decide if they will lend to this individual or not. There are often lending decisions that are made in exactly this manner, but there are other options as well.
A merchant cash advance is one type of lending that gets away from the traditional picture of lending and borrowing that we often hold in our mind’s eye. It is a more flexible way to borrow money for business purposes. A lot of business owners appreciate the fact that borrowing money in this manner is a lot faster and less invasive in some respects than is borrowing in the more traditional sense.
You may have asked yourself how this type of loan could possibly work. The answer is that the lender receives a portion of the profits that the borrower generates in his or her business for a period until the loan plus interest is repaid. Those terms are all ironed out ahead of time when the loan documents are originated to begin with. It is critically important to review the terms and conditions of the loan before you agree to sign on to it.
Why might a person agree to take out a merchant cash advance and sacrifice some of their profits to do so? There are a variety of reasons that borrowers have cited in the past for doing so. One of the most common reasons is to meet some emergency short-term experiences that they do not otherwise have the funding to meet. This could be something as simple as payroll. No business wants to end up missing paying their payroll for fear of angry employees, bad public relations, and perhaps even legal action. Fortunately, a short-term merchant cash advance could help take care of that very issue.
Inventory concerns are another issue commonly registered among those who decide to borrow this money. They want to make sure they are always fully stocked on their inventory because it is never clear exactly what customers will want to buy at any time. Having a full inventory whenever you need it will make it easier for you to keep customers happy with you. Again, this may require you to borrow a merchant cash advance to make it happen.
Borrowing a merchant cash advance means that you can get your funds a lot faster than if you were to try to borrow a traditional loan. The lenders of a merchant cash advance do not require nearly as much documentation in order to give you a loan. They only need to look at some of your receipts to see what kind of consistent profits you generate on a regular basis. This will help the lender determine their odds of being repaid in a timely manner.
You have a variety of options when it comes to borrowing the money that you require, but there are only so many options that can get those funds into your account as quickly and painlessly as a merchant cash advance. You don’t have to worry about paying out of pocket today (only when your profits start to roll in), and you can get those quick funds to take care of your emergency. Imagine not having to stress over how you are going to pay for yet another issue that has come up in the company. The relief alone may make this type of loan worth the payment.
In a sense you are taking a chance on yourself when you decide to borrow a merchant cash advance. No one else is going to be repaying the loan except you and whatever profits you can potentially generate from the business you have created. Those who have faith in their companies and who really believe in themselves should take a leap of faith with this kind of lending if they are serious about keeping their business going. There are some naysayers who will try to steer people away from just about any financial product, but you have to decide for yourself what you feel is the right call and go from there.