Merchant cash advance, a word that business owners may be familiar with but don’t know much about or how it works. A merchant cash advance, is an alternative financing option available for business owners. With 2018 officially behind us, business owners might consider receiving funding to help improve their business, as we recently explored in this post.
Here are four ways a merchant cash advance can help get your business going in the new year and beyond.
There is minimal waiting time to secure funds.
Getting money from a bank can be a long and drawn out process. If you’re looking for a way to get funding in a convenient way, a merchant cash advance is the way to go. It begins with submitting an application or speaking with one of Platinum Rapid Funding Groups representatives.
From there, they will look at daily credit card receipts to see if the business is in a position to support taking the merchant cash advance. Other steps before receiving funding include a review from their underwriting and risk department. From beginning to end, the entire process should take about a week.
Repayment plans can fluctuate depending on business success.
A merchant cash advance is flexible in payment options. For example, maybe a smoothie shop had a broken blender which slowed down business, therefore, their daily revenue decreased. A lot of merchant cash advance companies will offer a repayment schedule that is flexible for businesses which are cyclical and/or income is significantly higher during certain periods of the year.
Obviously, it works in favor of the business if they are able to make sales and therefore pay the advance sooner rather than later. The APR for an average merchant cash advance might be higher than other options in the market so quick success in business can result in fee reduction. Share as much information about your business with your representative so they can devise the best plan for your business.
There is no collateral needed with merchant cash advances.
Many business professionals are wary about putting up significant amounts of collateral to take out any type of financing. Merchant cash advances do not require collateral, since they are unsecured.
In some cases, a merchant cash advance provider will ask for a personal guarantee. This is a written agreement that makes a person responsible for the full repayment of the advance. This is the only way a provider might try to get some of their losses back.
There is no need for perfect credit.
One of the biggest barriers in the business world for a lot of professionals is their credit score. Most ways to get money through business or personal loans require a strong personal credit score, as well as a strong business credit score and established borrowing history. With a merchant cash advance, that isn’t needed because a merchant cash advance isn’t a loan. A big difference, with distinction. The approval depends more on how long your business has been running, your previous/current/projected number of sales and past payment history with debt.