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Businesses around the world require money for their daily operations. It is vital in maintaining inventory, paying suppliers and growth of the business. However, cash flow may sometimes be a major problem and banks are ever cautious of giving loans. Merchant cash advance has turned out to be a better alternative to get cash and it has become a popular solution for businesses in need of quick cash.
It is of great advantage, as it does not take collateral and credit ratings to secure an advance. The merchants seek only to buy a part of the businesses future credit sales. If an agreement is reached, one is given money, which is to be paid by deductions on future credit sales. This is in contrast to the bank, which checks your credit rating and assurance in form of collateral.
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.
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.
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.
It is of great advantage, as it does not take collateral and credit ratings to secure an advance. The merchants seek only to buy a part of the businesses future credit sales. If an agreement is reached, one is given money, which is to be paid by deductions on future credit sales. This is in contrast to the bank, which checks your credit rating and assurance in form of collateral.
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.
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.
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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