A lot of people who do not own their own businesses have no idea what it is like to go through the daily funding process of those business. It is a tedious thing that hinges on creditor’s ability and desire to provide capital to the companies that need it. Many small business owners seek a loan from a traditional lender such as a bank or credit union, but there are other options available.
In Alabama it is possible to get a merchant cash advance to stay afloat and keep the business running as smoothly as possible. Some suggest that they prefer this to a traditional loan because they are not actually borrowing capital directly when they take our a merchant cash advance.
How It Works
Qualified merchants are able to apply for and receive a merchant cash advance against the receipts of the products or services that they will sell throughout a given period of time. There is an additional fee tacked on for the lender to collect as well.
An easy way to understand this concept is to picture the lender getting a small cut of the profits that your business generates for a set period of time. It is almost as if they are going into business with you in a small way rather than just lending you money. With this method of transaction the lender has a greater incentive to see your business thrive.
There are enormous advantages to using a merchant cash advance as opposed to a traditional loan. The first major advantage you will notice is that you don’t have to wait as long to get approved for a merchant cash advance. The funding time on this type of financial instrument is as little as forty-eight (48) hours. That is considerably faster than what a traditional lender can do if they approve you at all.
Merchant cash advances have an additional advantage in their favor in that the creditor wants to see your business do well when they lend out this type of money. They are only going to be able to collect on a percentage of sales that you make, so they want those sales to be as high as possible. A traditional lender does not have this incentive and only wants to have their loan money returned with interest paid out on top. You can see how a merchant lender makes a lot more sense in most cases.
You Can Get Approved Even With Bad Credit
There is nothing to say that you cannot get approved even if your credit is less than perfect. A lot of people and small businesses alike run into credit score issues for whatever reason. It is not a problem when you decide to go with a merchant cash advance.
Credit scores that would have traditional lenders sending you away are accepted by merchant cash advance lenders. They know that they will get paid back via the receipts, so they are perfectly happy to lend you the money that you require.
How To Apply
You can start the application process by providing statements of the credit card transactions that happen in your business on a given day. The creditor will take a look at these and determine how much they are able to lend to you based on how much they believe they can reasonably receive back from you over time. Thus, it is incredibly important to keep those records in order so that you can show a creditor just what they can expect to receive back.
It doesn’t have to take a long time to go through this process and receive your money. You can easily get that ball rolling in just a matter of a few days.
Make sure you are able to withstand the repayment process before borrowing this kind of loan. It is the height of irresponsibility to borrow money that you are not able to pay back, but many people try to do this kind of thing. Don’t put yourself in that category. You are capable of so much more, and the best way to prove this is to make sure you can repay everything before you borrow it.