Unique Funding Solutions Business Loans and Merchant Cash Advance
Business owners are bound to face situations where they’ll need an immediate funding solution. Cash is very important for a business because it is needed for maintaining inventory, paying suppliers and business growth.
Merchant cash advances are one of the alternative choices to consider when you’re in dire need of funds for your business. A merchant cash advance can be used by businesses for getting out of a tight situation.
In merchant cash advance financing, you can receive a lump sum of working capital from a cash advance company in exchange for a certain amount of your business’ future credit card sales. It allows you to finance future sales and get funded quickly.
There are plenty of benefits to utilizing a merchant cash advance as your financing option:
. Fast Applications and Collections
. No Need for Credit or Collateral
. Fast Cash Access
. High Approval Rate
. Collections Based on Revenue
Who Should Consider a Merchant Cash Advance?
Merchant cash advances are typically used by businesses that need fast access to cash and have a steady credit card and debit card transactions. Retailers and restaurants are some of the types of businesses that would be appropriate candidates.
Merchant cash advances may also perfectly suit newer businesses that have sufficient credit card transactions but haven’t been operating long enough to establish a solid credit history.
Like business loans, funding from cash advance providers can be used for a variety of business expenses, including advertising and marketing, purchasing inventory, purchasing equipment, renovating or expanding, and more.
Quick And Easy Application Process
Applying for a merchant cash advance is quick and easy. The online application process makes it quick and easy to apply for a merchant cash advance and get a response.
A traditional loan can take several weeks or even months until being processed, but the merchant cash advance funding is usually quick. This is an important benefit when immediate access to funding is needed.
Unlike a traditional loan, there are no complicated application processes or time-consuming credit checks involved.
You simply go online and provide the required information. It shouldn’t take long to complete and provide specific documentation pertaining to your business. Most merchant cash advance providers respond within a few days.
Documents you need:
. Bank Statements
. Driver’s License
. Credit Score
. Voided Business Check
. Credit Card Processing Statements
. Business Tax Returns
As mentioned above, cash advance lenders can make a decision within hours and give you access to the funds within a matter of days. That’s certainly an advantage if you need money in a hurry to cover payroll or an unforeseen business expense.
How It Works
An agreement is made between the business owner and the merchant cash advance lender regarding the term of the advance, advance amount, payback amount and holdback. After an agreement has been reached, the fund is transferred to the business owner’s bank account in exchange for a future portion or percentage of credit card receipts.
Most merchant cash advance providers do not consider their transactions to be a business loan, but rather an advance based on your future sales. To determine how much cash to provide, funding companies review your information and documents, including banks statements, credit card sales, and commercial sales. With these reports, they have an idea of your future sales potential.
Paying back the funds
Repayment is made easy via auto debit through the merchant account. Once the funds are provided to you, a percentage of your daily credit card sales will be automatically deducted from your credit card processor or bank account. You only pay when you make sales, and each day, you simply pay back a percentage of the amount you make.
A big problem with traditional bank loans is that when you don’t make sales, you will have problems paying back the loan. With the merchant cash advance, you do not have this problem since you make payment only when you make money. Payments can fluctuate along with your credit card sales volume, which means you won’t be stuck with a payment amount you cannot handle. Usually, the payback period for a merchant cash advance ranges from 3 months to 15 months.
You should be aware that a merchant cash advance is more expensive than a traditional small business loan, but it is a quick, easy way to get access to working capital even with poor credit or no collateral. If you don’t want to waste valuable time going through the complicated process and hassles of applying for a traditional loan, a merchant cash advance is an option to explore.
But before you finalize the transaction, it is very important that you carefully go over the cash advance contract. It is crucial that you understand the details regarding the payback amount and term and conditions of the cash advance.