Merchant Cash Advance – Benefits And Disadvantages For Today’s Small Business Owners
For those merchants with less than stellar credit history, a merchant cash advance can most likely become a needed part of maintaining with small business overhead.
The advantage of using credit card factoring to finance needed purchases is that there really is no restrictions placed on what one can buy. The money can be put to use in order to purchase equipment, fix or renew a storefront or even pay off taxes.
As a merchant would forecast, credit card funding entails higher interest fees than those attained from a more traditional venue, such as your local lender. This means that through the duration of the advance, you pay more in addition for the privilege of quick access to cash and fewer demands. On the other hand, for those who make use of credit card funding, the repayment amount is often directly attached to the credit card sales of the company, thus eliminating worries over not having enough to pay the monthly fees and keep up with additional business overhead.
Some more advantages for the small business owner in the market for working capital through a merchant cash advance include:
No Collateral needed – No fees to originate the cash advance – No limitations on the use of money – No set payment maturity date – Fast turn around – High Approval Rate
Albeit a merchant cash advance creates more funding choices to a larger number of entrepreneurs, there are a couple of fairly specific necessities in order to qualify. Each funding company has their own specific requirements, but the following examples are the most frequently seen throughout the industry:
The small business owner must have been in business for 6 months to 1 year – The small business owner must have the minimum 6 months of credit card processing with a certain minimum amount of credit card business monthly – The merchant must have a verifiable lease that will be valid for the minimum one more year – The funding company may require transfer of all credit card processing sales to their machines – The type of business must be acceptable and legal.
Since early 2008 Daniel Samoohi has aided thousands of business owners in finding trustworthy lenders in order to review quotes for a merchant cash advance. By making lenders compete with each other, Daniel also assists businesses find great deals for business cash advances.