Are you a small business looking for funds? Finding necessary funding for the various business operations can be very challenging. All businesses, particularly small and medium-sized enterprises, need adequate working capital and a positive cash flow to succeed. There are a lot of traditional loans that are available in the market. But issues like lack of collaterals, paper-works, or high-interest rates are serious problems to many entrepreneurs and small businesses. Since at some point your business needs a cash inflow once you run out of your reserves. There is an alternative that brings an effective solution to all the problems- Merchant Cash Advance. It is a one-time cash payment in exchange for future credit card sales to a business.
Why is Merchant Cash Advance beneficial?
- Easy Application – Unlike conventional bank business loans, merchant cash advances are simple to apply for. You can get your money in a week if you have less paperwork and simpler eligibility.
- Quick Approval – Merchant cash advance providers do not have strict standards, making them more available to small enterprises and entrepreneurs. A bank, on the other hand, must evaluate your company’s financial and bank statements to approve a conventional loan. It shows details about your company’s cash flow and helps the bank determine the loan amount. Many small businesses with a low-profit margin or that have only been in business for a short time are automatically disqualified. Merchant Cash Advance has fewer requirements, making them ideal for small businesses and startups.
- No interest rate – Another significant benefit of a merchant cash advance is that there are no hidden fees or interest because it is not a loan. You will, however, be charged a high APR (Annual Percentage Rate). Before selecting a merchant cash advance supplier, make sure to check the APR rates.
- Credit Score – For traditional bank loans, a business or an entrepreneur needs to have a good credit score. This used to create a big barrier for SMEs. But now, they can apply for Merchant cash advance since even a poor credit score does not matter. The providers only check your credit score to calculate the factor rate.
- No collateral required – To obtain a conventional small business loan from a bank, you may be required to use your most valuable assets as collateral. Which would then be forfeited if you were unable to repay the loan. But merchant cash advance allows your company to get the money it needs without putting its most valuable assets at risk.
How to apply for it?
In comparison to the traditional methods, a Merchant cash advance has many benefits to SMEs. Moreover, the funds you receive can be used in any way to help your company grow. There are no restrictions, giving you greater flexibility. However, many people are still unfamiliar with the process of application.
Initially, your company applies for funding from a merchant cash advance provider in the same way as it would for a bank loan. The finance company then looks into the specifics of your company to see if it qualifies for the loan.
You can simply do this process by visiting flexibilitycapital.com and choosing a deal that suits you the best. Submit all the required documents and after looking at the eligibility, your loan will be approved by the provider. Make sure to submit your bank statement for easy analysis of your eligibility. Once, the loan is approved, you will receive the amount in your mentioned bank account.
The amount of cash you will get is determined by your average monthly credit/debit card sales. Lenders typically advance between 50% and 250 percent of your credit card sales volume. To ascertain how much you are eligible for, the lender will request your credit card sales statement for the previous three to six months.
The lender is then paid back via automatic debits from your credit or debit card sales. The proportion ranges from 5% to 20%, depending on the amount of money you have borrowed in advance. Depending on your credit/debit card sales volume, the repayment time will be as short as 90 days or as long as 18 months.
Also, you can know if your business is eligible for a business bank loan or not. Read here to find more about it.