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.
They work differently from banks, as they do not require the many processes that are present in banks. Credit ratings and collateral are rubbished off and they consider only buying a portion of ones future credit sales mostly on a discount. Money is often given when an agreement is reached between the two parties and is paid in form of deductions from credit sales.
There is no credit or collateral that is at stake. While bank loans can affect a business credit rating, cash advances deal with sales transactions and therefore stay out of credit ratings. The merchants themselves do not risk losing collateral, as it is the case with many bank loans. Therefore, it is a safe way to access money without risking a lot.
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.
Since a business needs money urgently it is logical if they can get funding at the shortest possible time. If you wait for the bank, you will take long periods and the damage to your business could be done. Luckily, merchants only go over a few things and one can get funding in a short time, usually within a week. This fast process makes business able to attend and solve urgent matters.
Loan application most of the time ends up rejected for a whole lot of reasons. Advances however, have a high approval rate since the merchants are more concerned about the performance of the business than their credit status. Thus, any stable business can be almost be assured of an advance. The amount only varies as per the average monthly revenue in previous years.
The payment of the cash advances is very considerate since they are revenue based. For them to get paid, you must get paid first. This is probably the biggest advantage they have over bank loans. While banks require a fixed monthly payment, advances fluctuate as per the sales volume of the business. This percentage collection helps to support a business and does not put a financial strain on 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.
They work differently from banks, as they do not require the many processes that are present in banks. Credit ratings and collateral are rubbished off and they consider only buying a portion of ones future credit sales mostly on a discount. Money is often given when an agreement is reached between the two parties and is paid in form of deductions from credit sales.
There is no credit or collateral that is at stake. While bank loans can affect a business credit rating, cash advances deal with sales transactions and therefore stay out of credit ratings. The merchants themselves do not risk losing collateral, as it is the case with many bank loans. Therefore, it is a safe way to access money without risking a lot.
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.
Since a business needs money urgently it is logical if they can get funding at the shortest possible time. If you wait for the bank, you will take long periods and the damage to your business could be done. Luckily, merchants only go over a few things and one can get funding in a short time, usually within a week. This fast process makes business able to attend and solve urgent matters.
Loan application most of the time ends up rejected for a whole lot of reasons. Advances however, have a high approval rate since the merchants are more concerned about the performance of the business than their credit status. Thus, any stable business can be almost be assured of an advance. The amount only varies as per the average monthly revenue in previous years.
The payment of the cash advances is very considerate since they are revenue based. For them to get paid, you must get paid first. This is probably the biggest advantage they have over bank loans. While banks require a fixed monthly payment, advances fluctuate as per the sales volume of the business. This percentage collection helps to support a business and does not put a financial strain on 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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