Small businesses need money, that’s all there is to it. If only it were as easy as it sounds. Startups and small businesses are facing an uphill climb and traditional banks may not consider them stable enough to give a loan. To still get what you need, a merchant cash advance may be a better option.
According to a study conducted by Cornell University, 30% of small businesses may fail or change ownership within the first year. Medical offices have to wait for insurance companies to pay out, auto shops need to restock parts, and retail stores and salons need to stay on top of trends in order to keep their doors open. One way to accomplish this is by obtaining a merchant cash advance. There is no risk to personal assets, no credit checks, and typically a quick approval time.
1 in 5 small businesses get approved for business loans, the odds are not in your favor. With a merchant cash advance, you can have funding within hours whereas the bank may take a few weeks to go through the entire process.
What Are the Benefits of a Merchant Cash Advance?
1. Receive Cash Quickly
In most cases, you won’t have to wait very long until the money is deposited into your account. If you needed to make a large purchase a cash advance could be beneficial.
2. Credit Scores Aren’t Everything
Usually, it is easier to be approved for a merchant cash advance VS a loan. We have our online application processing making it extremely quick and easy from start to finish. As long as you are doing credit card sales each month there is a slim chance that you would be denied. Merchant cash advances aren’t your standard small business loan, so you don’t have to offer collateral or your credit history in exchange for the loan.
3. No Set Payment Amount
Since a cash advance is not a loan there are no set monthly payments or repayment terms. Think of it as taking a lump sum payment of cash in exchange for monthly credit card sales.
4. No Purchase Restrictions
Loans for small businesses come with restrictions on what you can spend the money on. For instance, the Small Business Administration’s 504 loan program can’t be used for inventory, while SBA Microloans can’t be used to purchase real estate or pay off debt. Taking spending restrictions out of the picture it’s easy to find funding with the flexibility to meet your needs.
You aren’t risking anything with a merchant cash advance because it is just a sale of future revenue. As long as the credit card sales are there you won’t have to worry about a delinquent account or loan defaults. If there is a slower month, you pay less. When business is booming, you pay a bit more.