The merchant cash advance must not be confused with a loan. It is not a loan. The reason that you are not applying for a business loan may be because of your personal and business credit scores. Traditional lenders determine whether they will grant you a loan or not based on your credit scores. If you have low credit scores, you are not likely to receive a loan from a traditional lender.
The Merchant Cash Advance
This does not mean that you cannot get the money that you need for your business expenses right now because you can apply for a merchant cash advance. A merchant cash advance does not depend on your credit score. Traditional lenders will refuse to offer you a loan if you have a low credit score, or they will charge you a very high interest rate. On top of that, you may not be able to qualify for the large sum of money that you need to pay your expenses.
With a merchant cash advance, we will determine whether or not you qualify for an advance based on your daily credit card receipts. The money that you will receive from us for an advance will be a portion of the amount of money that you are expecting to receive from your future credit card sales. That’s why it isn’t considered to be a loan.
The Differences between a Loan and an Advance
You will not need to offer your house or other property as collateral. When you present your home as collateral for a loan and you find that it is necessary to default on the loan, the lender has every right to seize the property and sell it as payment for the loan. Therefore, a cash advance is not as dangerous to you as a loan because you will not be in peril of losing your home or other valuable property.
The amount that you will borrow will depend on your average credit card receipts. Then, you will be able to repay the advance right away because we will receive a percentage of your daily credit card receipts. This could mean that you would receive a larger sum of money than you would qualify to receive from a traditional lender. Your interest rate will range from 5 percent to 20 percent, and the terms of the advance will last between 90 days and 18 months.
Because this isn’t a traditional loan, you don’t have to use the money for any particular purpose. For example, you can use it to make payroll or to purchase the inventory that you are lacking. You can also use it to pay for the repairs that your building needs or to pay for new appliances or equipment.
A merchant cash advance is better than applying for a traditional business loan because a traditional lender would take approximately two weeks to let you know whether or not you will be receiving it. Merchant cash advances do not take that long, so if you need money very quickly, this is the type of transaction that can help you right away.
Merchant cash advances will be approved in about one week. You don’t need to fill out all of the paperwork that is required when you apply with a traditional lender. You may even be able to receive the money that you need in one day. Sometimes, it takes two days.
Even if you have not been in business for very long, you can apply for a merchant cash advance. This would not be the case for a traditional lender, but we know that it can be hard to start a new business. A merchant cash advance will replenish your coffers, and you can be back in business immediately.