Merchant cash advances have become a lifeline for many businesses in the last couple of years. If you are planning to get a merchant cash advance but have doubts, this article may provide more information.
What are the benefits of the merchant cash advance?
1. No credit check or collateral at stake
Traditional bank loans will require you to have a good credit score before they approve your loan. The credit score may not even guarantee you a reasonable interest rate and worse, you are not even guaranteed for a loan. This means that if you have bad credit, you may not be able to get a bank loan at all. This could eventually mean that your business is at a risk if you cannot get the money your business needs urgently.
This is when merchant cash advances rise to the occasion. Merchant cash advances providers are not interested in your credit score. They only deal with your business. Thus whether or not you get the cash advance all depends on the state of your business.
The plan also gives you peace of mind. This is because merchant cash advances providers do not look for collateral when granting you a merchant cash advance. This is because the merchant cash advance is not considered a loan. It’s an exchange of cash in exchange for future credit card sales and debit card sales.
Thus in the case of things don’t go as planned, you don’t give in to stress yourself about the risk of losing your home or car or whatever is used as collateral. Your house and car are always safe when it comes to taking out a merchant cash advance.
2. Easy application
Merchant cash advances are just one of the easiest financial plans you can get as there is not much that is required to process the cash advance. Comparing this with a traditional loan, the merchant cash advance is pretty easy to apply.
It takes weeks and probably months to apply for a traditional bank loan. This is because of the numerous background checks they make. All these will take more than a month to review. A merchant cash advance usually takes less than 24 hours to approve. You will get your cash advance in about 7-10 days.
If two merchants decide to take out a merchant cash advance and a bank loan respectively, the one who went with the bank loan will probably have a hard time before finally getting his money compared to the one who took out the merchant cash advance. A merchant cash advance is very convenient, simple and attractive to anyone who knows that time is money.
3. Quick access to cash
The simplicity of the financing plan makes access to cash easy for a business. This is because of the simplicity if the paperwork that is needed for the application.
While commercial companies offering loans are looking at tax returns, credit scores and all types of documentations and credentials, merchant cash advance companies just need the percentage rate at which the sales will be divided and the amount of time that will take for them to get their money back.
It becomes possible to get your cash injected into your business in about a week or so instead of the months it takes for commercial loans to be approved. With merchant cash advances, you get the money quickly to turn around your business.
The main benefit if this plan is the accessibility it provides. Many businesses can apply and benefit from it. As long as you are making sales, you are just as qualified as another person who applies for a merchant cash advance.
4. High approval rate
This is largely because of the opportunities it presents to the users if this financing plan. Technically the business is judged by the average amount of money it makes monthly.
This means you get the average for the previous year to determine the state of the company and the trend at which the company is moving. Due to this, the plan has been having a high approval rate especially from those who have benefited from it.
5. Revenue-based collection
The merchant cash advance company only gets paid when their customer (your business) gets paid. The financing plan is designed in such a way that repayment money comes from credit card and debit card sales of the business. This if a business doesn’t make money, the merchant cash advance provider doesn’t get paid. It’s that simple. Thus, the business proprietor has nothing to worry about.
The commercial loans work in such a way that, for a loan lend to a business, there is the principal payment plus the interest. Now repayment comes as followed: you have to pay a monthly amount of cash to the lender each month, failure to which you risk hefty penalties and even worse, loss of your collateral item.
When it comes to merchant cash advance industry, you just need to keep your thoughts and concentration on making sales. The merchant cash advance debt will slowly repay itself. This allows you to keep a clear mind and focus on improving your business.
A merchant cash advance is one of the many business financing plans you can get. Typically, it helps you upgrade your business or help pay off other debts or help you solve all sorts of business-related problems. The most attractive feature is the repayment factors. They keep you focused on the business instead of worrying about repayment.