Grow a Business With a Merchant Cash Advance

It is not easy to be a small business owner. As banks tighten their loan requirements, more and more businesses are having trouble getting access to the cash they need to grow and thrive. It takes money to make money, and for some businesses, the best way to get the capital needed to prosper is with a merchant cash advance. Merchant cash advances are not loans, but rather are a purchase of future credit card sales. Through a merchant cash advance, businesses can have access to a sum of money upfront, which they can then payback through a set percentage of their monthly credit card receipts.

Consider these five reasons why a merchant cash advance can be a smart choice for any business.

1. Easy applications.

Traditional loans require extensive paperwork. Merchant cash advances, by contrast, have far less paperwork, making them easier to understand and apply for. Many applications are available online for maximum convenience. The forms require basic contact and financial information and are easily completed in one sitting.

2. Variable payment plans.

Many businesses are drawn to merchant cash advances because the payment plans are directly related to monthly sales, which helps ensure that the payments are manageable, even during slower months. This is because the required payment is based on a percentage of the credit card receipts. Therefore, during a month with fewer sales, less money would be required, allowing businesses to keep paying off their merchant cash advance no matter how sales are doing. Most businesses pay off a merchant cash advance within a year on this system.

3. No collateral needed.

Many smaller businesses that do not have much working capital also do not have enough collateral to make them eligible for traditional loans. For this reason, many small to mid sized companies turn to merchant cash advances. These advances look at the credit card income a business has, something which banks tend not to take into consideration, thereby excluding some businesses that are prosperous but do not meet traditional requirements.

4. Broad qualifications.

Merchant cash advances also appeal to businesses that may have spotty credit histories. These businesses rarely fare well with traditional loans, but because of the nature of a merchant cash advance, far more companies are eligible for funds. A bad credit report does not necessarily disqualify businesses from arranging a merchant cash advance.

5. Quick access to funds.

A merchant cash advance is also a smart choice when money is needed quickly. Most applications can be processed and approved in seven to ten business days. This means in less than two weeks businesses can have access to much needed funds. A normal cash advance can range anywhere from $5,000 to over $150,000 for qualified businesses.

Merchant cash advances may not be the best choice for all companies, but many smaller or mid sized businesses that need working capital on flexible terms find that a merchant cash advance is a crucial element for growth.