Occasionally, businesses usually have problems in raising finances. With daily operations to attend to, it is important to secure funds to keep the business up and running. Most would go for commercial lenders but due to the various hurdles, it can be quite hard to secure loans. Due to this, many thus turn for a merchant cash advance, which is the best option when it comes to getting some quick money.
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.
Credit rating of a business is a very important factor and borrowing loans can affect it negatively. The funding offered by merchants only deals with the amount of sales transactions and does not affect the credit rating. This benefit is mutual as the merchants themselves do not lose collateral and thus is a great way to get funding without much risk.
When you apply for a loan in a bank, many procedures are followed. This includes going over your records countless times to evaluate if your application is valid or not. Merchants however, do not need financial statements and tax returns, as the business only has to satisfy only two conditions. The business has to make a certain amount in monthly credit sales and must have been in operation for a cetain months.
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.
It is common to see many loan applications rejected by banks for various reasons. This means that you may not be certain about getting a loan from your bank. Advances however, are accepted most of the time. This is because the performance of the business is the determinant factor, which is not a problem for stable businesses.
Advances are paid on a revenue basis and this can help lift the financial strain of the business. One therefore pays as they receive income, which means there are no deadlines to be met. Bank loans require fixed installments to be paid monthly, which can be inconvenient especially on a low season. The advances are however paid in as a percentage of the income made and thus the business is not in a fix to pay them.
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.
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.
Credit rating of a business is a very important factor and borrowing loans can affect it negatively. The funding offered by merchants only deals with the amount of sales transactions and does not affect the credit rating. This benefit is mutual as the merchants themselves do not lose collateral and thus is a great way to get funding without much risk.
When you apply for a loan in a bank, many procedures are followed. This includes going over your records countless times to evaluate if your application is valid or not. Merchants however, do not need financial statements and tax returns, as the business only has to satisfy only two conditions. The business has to make a certain amount in monthly credit sales and must have been in operation for a cetain months.
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.
It is common to see many loan applications rejected by banks for various reasons. This means that you may not be certain about getting a loan from your bank. Advances however, are accepted most of the time. This is because the performance of the business is the determinant factor, which is not a problem for stable businesses.
Advances are paid on a revenue basis and this can help lift the financial strain of the business. One therefore pays as they receive income, which means there are no deadlines to be met. Bank loans require fixed installments to be paid monthly, which can be inconvenient especially on a low season. The advances are however paid in as a percentage of the income made and thus the business is not in a fix to pay them.
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.
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