Finding a merchant cash advance in Alaska might be the only way for you to secure the funding your business needs to grow. It’s a way for you to borrow the cash you need when you’re otherwise unable to secure funding. If you’ve been denied for a business loan or if you don’t have the time to wait for a business loan to fund, you have this option to rely on. A merchant cash advance is not like a loan in which you wait weeks for the underwriting process to occur. It’s also not a loan you spend years paying off. It’s all about quick funding and quick repayment. Is it right for you and your business?
What is A Merchant Cash Advance?
A merchant cash advance is a form of lending that’s designed for people who own businesses to get funding quickly and efficiently. The pros far outweigh the cons, but those cons are worth discussing. This is an expensive way to borrow money for your business. You do not pay an interest rate for many years. You pay a factor rate, and you make a daily payment. Your lender takes your repayment out of your bank account each day. The amount varies because it is based on your credit and debit card sales for the day.
The traditional factor rate begins around 1.14, which is equivalent to 15 percent interest. It’s expensive, but you only pay on this type of loan for approximately nine months. Some people are able to repay their cash advance faster because they make more credit card sales. If you are borrowing the money to grow your business, you can count on being able to pay off your cash advance a little faster.
This loan funds in as little as one or two business days. You needn’t provide as much paperwork during the application process, either. Instead, you spend your time focused on turning in just a few documents. This includes your business tax returns and credit card processing statements, your driver’s license, and your bank statements. It’s a simple process.
Who Needs A Merchant Cash Advance?
Ideally, you will find a small business loan to help your business grow. However, this is not always possible for many business owners. The lending requirements associated with a traditional business loan are strict. You must have good credit both professionally and personally, and you must have a business for a long time. New business owners needn’t apply for small business loans. Additionally, you must be able to provide a business plan that carefully outlines all you want to do with this money, how it will benefit your business, and how you will grow with this funding.
You should have a business plan regardless, but your business plan can be the whole reason your small business loan application is denied. With a merchant cash advance, it’s less important that you have a business that’s older or that you have a great business and personal credit score. The worse your score, of course, the higher your factor rate. If you take out a merchant cash advance, you want to be sure you can generate enough credit card sales to make it worth your while.
This is an expensive form of borrowing, but it’s often the only way you can fund the needs of your business if you have questionable credit, a business plan that doesn’t make sense to the bank, or even a newer business. You can take this money and do with it what you need to do. Whether you are a restaurant in need of new equipment to keep up with orders or you have a small production company that needs money to keep up production, you can use a cash advance to help you pay for what you need.
The process takes only a few days once your application is approved. It’s helpful to check your credit for mistakes prior to applying. While you’re more likely to be approved for this type of loan, your credit score should be as good as possible to ensure your factor rate is more affordable.