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Using merchant cash advance loans to finance your business
If you have no collateral and you need money for your business now, a merchant cash advance loan may be your only option. Merchant cash advance loans are easy to obtain and it hold several advantages over traditional business financing:
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- Fast approval rate, normally within 24 hours
- High approval rate, 95 percent of customers are approved
- No collateral is required
- Excellent credit is not required
- You can set the amount of money you need to borrow up to $500,000
Understanding merchant cash advance loans
Merchant cash advance loans are quite different from all the other loans out there. The lender will advance you an amount of money based on the volume of your credit card sales. You will then agree to their terms and they will start taking a small amount of money from each credit card sale. This money will help to pay off the balance you owe the lender.
If you demonstrate proper re-payment abilities the lender may qualify you for additional funds within 90 days of signing the loan. Depending upon how much money you borrow, it will take about 6 months to re-pay the money you borrow. Remember, it is all based on your credit card sales so you want to encourage your customers to pay via credit card over cash and check.
The Pros of merchant cash advance loans
As stated previously, one of the biggest reasons to apply for a merchant cash advance loan is because you have been denied for a traditional bank loan. Another pro to a merchant cash advance loan is that you don't need collateral and you can set-up a flexible re-payment policy.
Merchant cash advance loans are easier to obtain since no credit check is required. You will know the lenders decision within 24 hours and most businesses will have their money within 7 days.
The Cons of merchant cash advance loans
The biggest problem to a merchant cash advance loan is that they cost more than traditional loans. The interest rates are higher, so you end up paying about 15 percent more than you would with a traditional loan (this all depends on how much you borrow and your credit card sales).
Why should you use a merchant cash advance loan?
If you have been denied a traditional business loan, a merchant cash advance loan is really your only option. You can look for ways to cut-back on spending to improve your cash-flow, but you probably won't see a return on this for a few weeks to a few months. Merchant cash advance loans provide you with the money you need now and they offer flexible pay-back structures so you don't lose all of your income.
Since the payment structures are taken from each credit card sale, it makes it easier for you to focus on your other expenses. This will help to reduce the pressure you may be feeling to keep your books in the red and you can worry about maintaining control of your finances so you can expand your business.
Your cash and check sales are yours to keep since the merchant cash advance loans are not based against them. This can help you get out of the red quicker since you will have more access to your cash. It can also help the company make their salary payments on-time. Merchant cash advance loans are a great option if you do a lot of credit card sales and you desperately need money to finance your business.
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