If you’re a business owner and you’re seeking a loan but face rejection because of bad credit, then consider a Florida merchant cash advance. This is an option that is often easier to obtain than a loan that you would apply for through a bank or a credit union. It’s also beneficial if you’re looking for an easier way to pay the loan back as the payments each month to the lender are made through your credit and debit card sales. A merchant cash advance is an option if you only need to borrow a minimal amount of money for your business for a short time.
Keep in mind that a merchant advance isn’t like a traditional loan that you might take out from a bank or another financial institution. The advance is a payment that is based on the future income that your business receives from customers. You will get one lump payment, similar to what you would get when you take out a loan. However, you will work with the merchant to set a percentage of your credit and debit card sales that will be used to pay back the advance. This is considered a holdback of the money that you make from these types of sales each day. It could be an amount that is as small as 5 percent or as much as 20 percent depending on the overall sales that you have had for your business and your credit score. The amount of the advance that you receive will also be taken into consideration when determining the percentage of the payments that will be used to pay back the loan. Another factor is the length of time that you have to pay back the advance as a longer loan period could result in a smaller percentage of the sales that will be held back. Most merchants give businesses between 18 months and two years to pay back the advance. However, some merchants will only give you a few months if you are only receiving a minimal amount of money.
When the merchant begins looking at the amount that you can receive, your credit score will be examined as well as the number of sales you have taken in since your business has been open. Most of the time, only three to six months of sales are reviewed unless your business hasn’t been open for a very long time. Your advance could be 50 percent of the sales from debit and credit card transactions to as much as 250 percent. Keep in mind that the larger amount is usually reserved for businesses that have been open for a longer time and that have a healthy number of credit and debit card transactions.
There are a few benefits that you want to keep in mind about a Florida merchant cash advance. The process of applying and obtaining the advance is usually fairly easy and straightforward. There usually isn’t a lot of excess paperwork as much of the process is done online. When you’re approved for the advance, you’ll receive the money in a short time. This is beneficial if you need the money right away for business essentials that include inventory or other items that are needed to keep the store operational. You don’t need perfect credit, but you need to have a good score. This is something to remember if you might not have the best credit and are unable to obtain a loan through other means. There is usually no need for collateral, which is beneficial if you don’t want to put anything that you own in the store or that you personally own in a position to be taken away in case you are unable to make the payment.