how to get a merchant cash advance
Growing your business is your number one priority. Your small business has so much potential, and your job as a business owner is to find that potential and maximize it to increase profits. When your business grows, you’re able to offer more employment opportunities, you can take care of your own family, and you provide a good or a service that benefits your community. A business owner never really quits working, and you know that it takes money to make more money as a business owner. If you find yourself in a position to grow your business by expanding, hiring new employees, or purchasing new equipment, you need the funds to do it.
When A Business Loan Fails
Unfortunately, not everyone who owns a small business is able to secure a small business loan from a lender. Financial institutions want to give you money to help your business grow, but only if you meet a lengthy list of strict lending requirements. These requirements include everything from a good business credit score to a good personal credit score to a certain amount of time in business. You have to be able to prove you can repay your loan. You must provide collateral, and many people are forced to provide collateral in the form of their own homes. This means you could lose your home if you fail to repay the loan because your business plan didn’t work.
Speaking of business plans, your business plan must be specific and details if you hope to secure a traditional small business loan. If a lender doesn’t think that your plan to grow your business and increase profits is good enough, they will deny your loan and leave you right where you started. It takes weeks, and sometimes months, to secure a traditional business loan, and not everyone has the time to wait. What happens now? You either don’t qualify for a small business loan or you simply cannot wait six weeks or longer to secure a loan, and you don’t know what to do.
Consider a Cash Advance
Have you heard of a cash advance? It’s a form of lending that allows a small business owner to borrow money to grow your business, but the application requirements are a lot more lenient than they are for a traditional business loan. A merchant cash advance is typically funded in just a few days rather than weeks or months. You can have your money in hand within days of submitting your application.
This is money you borrow from a lender who wants you to make repayments in a non-traditional manner. For example, you don’t make a monthly payment every month to repay a merchant cash advance. You make a daily repayment, and that payment amount is based on the amount of credit and debit card sales you make that day. Merchant cash advance lenders take a portion of your everyday sales via credit and debit cards for repayment, and the amount fluctuates daily based on your sales that day. If you don’t make many sales, your payment drops. If you have a great sales day, your payment is higher that day.
A merchant cash advance also takes less time to repay. A traditional loan is repaid monthly over a set number of years as agreed upon in the application process. A merchant cash advance is repaid for approximately one year. Some people can repay the loan faster based on high sales, and some people need a little bit more time to repay their loans. What you should know about your cash advance is that you might pay a lot more to repay this loan even though the repayment period is significantly shorter. Interest rates can reach well into the triple digits depending on your application.
Is A Cash Advance the Right Choice?
Most people ask this question thinking that funding in a few days is too good to be true, and that’s because it is for some people. If you have a high credit score and you’ve been in business for a while, you should try to take out a small business loan first. If that doesn’t work, a merchant cash advance is the best option for you. It’s not the first option for many business owners because it is an expensive method of lending. You should only apply for a merchant cash advance if you have no other options.
Before you borrow anything from a cash advance lender, be sure you read all the fine print associated with your loan. You must know what you’re getting into before you sign the agreement. If you sign something you don’t know how to handle, you could end up in more debt and find yourself unable to pay it off. This is a form of lending that can benefit you and your business if you’re borrowing for the right reasons.