3 Things Every Small Business Owner Needs to Know about Merchant Cash Advances
If used it properly, merchant cash advance can be a great source of capital and quick financing for any type of small business. There are top three elements that make the business cash advance a unique and reliable business funding. Unique in terms of the requirements, time it takes to get the cash advance and also the repayment process.
Just to make you understand what merchant cash advance is all about, you first need to know the three most important things about it as well as the reasons why you should consider this type of business funding over bank loans.
Speed. Small businesses that are in need of capital need it fast. Emergency funds are needed immediately and if it will take a long wait before you can get the funds, it may cause even greater damage to your business. Merchant cash advance providers ensure that the funds are forwarded quickly to their clients. There is no need for lengthy application process. Because cash advance lenders have less strict requirements in order to be accepted, it takes faster for anyone to obtain the cash advance.
Easy Requirements. MCA providers ask for less strict requirements. They do not require you to present a good credit history. Providers rely on your future monthly cash receipts, so your current sales status is not that important to them. The only requirements in getting a cash advance are:
Credit card sales receipts for the last three months. You establishment needs to be earning at least $5,000 monthly from credit card transactions. There needs to be no bankruptcy issues within the last year. You need to have another year complete lease from your landlord.Repayment. When it comes to cash advance repayment, there are no interests unlike the ordinary bank loans. Interest for the cash advance repayment is usually 2 digits. In most cases, it is due within 90 days or less. But in most cases, the repayment time can be extended.
It is true that merchant cash advance costs a bit higher than traditional loans. However, because it is very easy and quick to get, merchants do not take any risks with it. The cash advance lender only takes about 12 to 20 percent from your daily credit card sales. That percentage will not damage your business as a whole.
So the next time you will need emergency cash for your business don’t think twice in getting a merchant cash advance. It is highly recommended for all small business owners who are in need of funds.