A Closer Look At Merchant Cash Advance
Are you in need of business financing really quick but having a hard time going through normal channels just to secure a loan? By now, you might already be aware that only a small percentage of businesses are able to get business financing from banks at any given time. You need not worry, though, because it is possible for you to get the funds that you need through merchant cash advances.
Getting business financing is really easy when you go for merchant loans. But what are they, really? What sets them apart from other types of loans?
Merchant cash advances have been in the US market for quite some time now. They are relatively new to the UK, a lot of entrepreneurs are starting to learn the advantages of securing a merchant advance. Why? Because it is by far the most convenient means for them in order to get business financing fast. As a matter of fact, its approval is just about 24 hours, and the funds can be released between 5 to 10 business days, tops. Bank loans – if they get approved, that – usually take weeks to get approved and several weeks again for the funds to be released.
What sets merchant cash advances apart from traditional loans from banks is that they are based on the average daily volume of your business’s credit card sales done in a month. In effect, your repayment is directly proportional to your earnings. This makes it possible for you to repay your advance without worrying too much about how your business will survive. When you go for bank loans, not only do you need to wait for your loan application to get approved, you would also be paying fixed monthly rates in order to settle them and to remain in good credit standing.
Many types of businesses benefit from merchant loans. They are normally chosen due to their great flexibility. You can use the funds any way you want, unlike bank loans wherein you can only use the funds for one specific purpose as stated in your application. What’s also great about them is that they will not affect your credit rating negatively.
If you are planning to go for a merchant cash advance, normally, the amount that you will be able to receive will be based on your business’s average monthly credit card sales for the past six months. Typically, you can be granted a minimum of a hundred percent of the average monthly income you get from your credit card sales. Your monthly re-payment usually around 10 percent of your total monthly income, making it really affordable. Upon paying around 50 percent of your merchant advance, you can already get another one without the need for re-application. These facts make merchant cash advances really viable and ideal.
Merchant cash advances make it possible for businesses to grow rapidly without too much red tape. If you want to be able to grow your business rapidly, considering a merchant cash advance is a great idea.