There comes a time when most business find themselves in need of urgent money. This is mostly due to daily expenses that are necessary for the business. However, when they go to banks to secure loans they usually come out empty handed due to various reasons. An alternative though can be found in merchant cash advances that can prove a very good short-term solution.
They work differently from banks, as they do not require the many processes that are present in banks. Credit ratings and collateral are rubbished off and they consider only buying a portion of ones future credit sales mostly on a discount. Money is often given when an agreement is reached between the two parties and is paid in form of deductions from credit sales.
When taking merchant deals, there is no risk of losing credit ratings of collateral, which is beneficial to both parties. Loans put a heavy burden on your credit rating and hinder the chances of one getting another loan. Advances though are paid as per the sales transactions and will not affect the credit rating of a business. Collateral is not risked on the part of the merchants making it a very secure way to get extra funds.
Banks take one through a very long process before they can secure a loan. All your documents are evaluated strictly making the application process very tiresome. Merchants give a faster way as they only check on two things that include your monthly credit card returns and time one has been in the business. You need to have earned a certain amount of revenue in the previous month and having been in business for a certain period to be eligible for such cash advances.
Another benefit is that one can access money relatively quick. Since merchants require very little paperwork, you can be funded almost immediately after the application. Commercial lenders would take weeks to go over ones documents and process them. This instant response can help a business seize big opportunities and attend to urgent financial matters.
While one can apply for a bank loan, there is a high possibility the loan request can be rejected. With the urgent need for money, most business cannot afford rejection and many will turn to merchant loans. They usually have a high approval rate, as performance of a business is their main consideration. As long as a business is stable, they are assured of getting the advance.
The advance offers a very flexible way to pay back your loan. They work on the principle that one has to earn money so that they can be paid. This alone makes the advances so much popular since banks offer rigid payment plans that are paid within a certain period. When business is high, the merchants earn a lot and vice versa. This prevents any kind of financial strain on a business.
If you plan to grow your business over the course of time, you would consider bank loans since they are very cost effective in the end. However, a few hurdles along the way may require urgent responses financially and that is when you call upon the services of a merchant. They will give you the much-needed boost to overcome these problems and keep you on track business wise.
Learn more about running credit cards. Stop by Jamal D White’s site where you can find out all about merchant services and what it can do for you.
