This is a fact: sooner or later, you will need money to fund your business and grow it. This is simply put, a fact of life. It doesn’t matter what type of business you own, how lucrative your industry is, or anything else. You need money to grow. The good news is, small business owners have options – especially if you have revenue coming in. If you have bad credit, then it’s hard to get a business loan, and funding. But, if you have a stream of revenue – it’s possible to get a merchant cash advance (MCA). Bad credit doesn’t mean you have a bad business, or a failing business. It just means somethings happened which have harmed your credit score. But you might have an otherwise profitable business. The good news is, you have options, and can get a merchant cash advance. Slow paying customers can be a huge problem, and put the brakes on an otherwise successful business. Sometimes, bad credit comes from things you can’t control. Anyone whose made it through tough times, like the market crash of 2008 – can speak to this. It’s easy for tough times to cripple you. When that happens, a merchant cash advance can help. You can get it, even with bad credit.
What’s a merchant cash advance
This is a tool to grow your business. Like any loan, or financial instrument, it has it’s benefits and drawbacks. Before you reach out for a merchant cash advance, you need to be aware of how it works, and consider the pro’s and con’s. Merchant cash advances aren’t based on your business credit. You will qualify for a merchant cash advance as long as you have a recurring debit, or credit, sale. The more credit card business you have, the larger the cash advance can be. It’s important to know that the more business you have, the greater the merchant cash advance can be, and the more you can borrow. The good thing about merchant cash advances is the fact you don’t have to actively make payments. You agree that a fixed % of the revenue is withdrawn from your future credit card transaction deposits. This money goes straight to merchant cash advance company giving you the cash advance.
You can choose to make the money withdrawn on a daily, weekly, or monthly basis. This is negotiable, and depends on your typical operations. The good thing about this withdrawal structure is that it makes it affordable and custom to your unique business.
Merchant Cash Advance can help even if you have poor credit
Business credit is super important in life. The better your business credit is, the easier it is to get a small business loan in the future. In addition, the lowest your interest rate will be. Most lenders hate risk, and they want to make sure you can repay the loan you take. If you are “risky,” they will turn you down, or give you harsh terms. Bad credit can, and will, hinder your business when you need money. With that being said, you CAN get a small business loan with bad credit if you opt for a merchant cash advance. You’ll end up paying more money to borrow the money, but you’ll have it quickly. You can use the money however you want – which is extremely valuable in a pinch.
The better your business credit is, the better terms you can get from people who are suppling you with goods and services. If your business credit is bad, then vendors will often ask you to pay cash up front. This can be a huge burden on your cash flow situation, but if a supplier sees a good credit rating – then they’re likely to give you the credit you need. Bottom line, good business credit will open doors for you. You can borrow more money, at cheaper rates.
How to fix your bad credit
The best way to build credit is borrow money, and pay it back timely and in full. Merchant cash advances are an opportunity to borrow money, even with bad credit. Compared to small business loans, it’s easier to repay a merchant cash advance. The quickest way you can get back on your way to good credit is to pay your debts consistently, in full, on time. Decrease your business credit card balance, which will have an immediate impact on your credit rating. It will reduce your debt ratio, and increase amount of available credit. Make an effort to pay bills timely. In some cases, it might behoove you to pay “earlier” than needed, just to make sure it’s paid.