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Bad Credit Merchant Cash Advances
Whether your business is having a cash flow problem or just needs cash for payroll, a merchant cash advance could be a useful funding option. A merchant cash advance is a way for you to get cash for all of your business needs. Once you apply for an advance, you can get cash in just 24 to 48 hours.
How a Merchant Cash Advance with Bad Credit
Unlike a loan, a merchant cash advance is just an advance based on your future credit card sales. When you apply for a merchant cash advance, the lender looks at your credit card sales and your company’s stability. Then, they give you an offer worth 50 to 250 percent of what you normally make in credit card sales each month.
When you pay back the advance, the amount you pay is based on your sales. You will generally repay 5 to 20 percent of your credit card sales. This amount is automatically taken out of your sales as soon as you get the advance. Depending on your sales, the term may be for 90 days to 24 months.
To qualify for an advance, you have to have a stable income from credit card sales. The lender will normally look at two to six months of your transactions. If you need cash quickly, a merchant cash advance is a viable alternative.
Are There Alternatives to a Bad Credit Merchant Cash Advance?
This type of funding option works best if you have an established record of credit card sales. It is also useful if you need cash quickly and want a flexible repayment plan. If you need cash and want an alternative, there are a few other traditional options that you can use.
Business credit cards: A business credit card can help you cover some of your expenses. It might also offer cash back rewards or travel points.
Term loans: If you have the extra time to apply for a loan and assets for collateral, then you can get a business loan. This type of loan is like a mortgage. You borrow a certain amount that has to be repaid over time. The lender may give you a fixed or variable rate. While the APR is often lower than a merchant cash advance or a credit card, it will generally take longer to apply for a business loan. In addition, the lender will often require a good credit score and a longer business record.
What Are the Benefits of a Bad Credit Merchant Cash Advance?
There are a number of reasons why merchant cash advances are popular among business owners. They offer a flexible repayment plan, fast cash and an easy application process. While they are not the right choice for everyone, they are definitely a useful option for business owners who need cash quickly.
No collateral necessary: Many banks require personal or business assets as collateral. The bank wants to make sure that they will get their money back if you cannot repay the loan. With a merchant cash advance, you do not have to use any collateral.
Fast cash: If you are suddenly suffering from a cash flow problem, an advance is a good option. After you apply for the advance, the money can be in your account within just 24 hours.
Credit scores are not an issue: Unlike a standard loan, you do not have to have a perfect credit score to get a merchant cash advance. The lenders are more lenient because they base the advance on your credit card sales. If you have strong credit card sales, then you can get approved for an advance.
High limits: The total amount of your advance is based on your credit card sales. You can get $2,500 to $2 million in just a day.
Simplified applications: Instead of going into your bank and spending days gathering your documents, you can apply for an advance online. All of your documents can be easily submitted online, and the entire approval process takes just a few hours.