Business line of credit online, merchant funding, and bank loans help entrepreneurs make their businesses successful. Merchant cash advance is a new kind of merchant funding known to many. In merchant funding through merchant cash advance, a credit card company converts future credit card sales into instant cash that the business owner can use for his/her business. There are several reasons why this type of loan is being preferred by many entrepreneurs than conventional bank loans. Let us look at some of their advantages.
For one, the processing and turnaround with merchant advance is faster. Merchant funding through merchant cash advance can be processed within a few days compared to bank loans, which usually takes a few weeks to months to process. Also, you need to provide a lot of documents such as tax returns, financial statements, etc. A merchant cash advance can be had faster and without too much hassle.
It has a higher approval rate. Merchant advance providers are more generous than banks; they are not so particular and choosy when it comes to approving applications. History of earlier bankruptcies and low FICO does not merit you possibilities of application denial. Generally you are only judged in two things, by your monthly credit card sales and by your number of months in business.
It has no upfront charges. Merchant advances do not oblige you to pay upfront costs such as application fees and some sorts of closing costs. It features a repayment that is more flexible. Typical bank loans strictly need you to repay them a fixed amount monthly. Merchant funding like merchant cash advance is more flexible. Plus, the required monthly repayment amount depends with your business performance. Merchant cash advance is more convenient as they do not usually impose overly expensive penalties if you happen to miss repayment due dates. What happens is that you will be asked to pledge a fixed part of your future credit card sales. Charges are lower when your business is poorly performing.
Personal guarantees are not usually required. When applying for merchant cash advances, you do not have to provide any collateral. When applying for merchant cash advances, you do not have to find a personal guarantor who will assure them of repayment in case you fail to do so. This is because they are more into the business credit card sales and not the owner per se.
Business line of credit online, merchant funding and bank loans sometimes serve as the lifeline of several entrepreneurs. A merchant cash advance would be best for the entrepreneur who needs short term funding to give his/her business a chance to thrive and grow bigger.