An accidental financial crisis is unavoidable for everyone. Collecting funds to overcome the crisis could be a big challenge when there was no digital funding system. However, in today’s era, the situation is completely different, technology has changed our lifestyle to another level. You can get a fund within a few minutes after applying for it. Therefore, quick financing is the new term in the financial perspective. It is very important to meet your financial needs. Quick loans are available in the form of salary advances, short-term funds, etc.
Quick financing is quite different from traditional funding. Traditional funds are available with the help of banks and financial organizations. For quick financing, the application process is fast with easy and quick verification and registration method. Once the lender verifies the information, your request for the fund will be approved. After, approval, the fund will transfer into your bank account. You can avail quick funds not only from banks but also from non-banking financial companies (NBFCs) and Peer- to- Peer lenders (P2P).
Merchant Cash Advance
Sometimes, a small business owner finds it much challenging to avail of the best funding option for their business. Thus, owners will seek the alternative due to the lack of collateral, or high credit debt. One such type of alternative funding option for small business owners is Merchant Cash Advance. In comparison to traditional funding, a merchant cash advance has some advantages. These advantages are quick approval, flexible repayment, and more. Once your application for the merchant cash advance is approved, then the lender will provide you with a lump sum. Then, you can repay the fund from your credit and debit sales which varies from 5% to 20%. You can repay within a period of 90 days to 18 months. Your eligibility for the funding is based on your credit card sales statement.
Benefits of Merchant Cash Advance
Several reasons make merchant cash advance more beneficial as compared to traditional funding. Therefore, below are given some benefits of Merchant Cash Advance:-
In traditional funding, the lender verifies every credit score and documents attached with the collateral before approving the fund. The approval period of the fund and to lend the fund to the borrower, generally takes a few weeks or even months. Whereas in Merchant Cash Advance, the application and verification process will complete in one or two days. Also, you will avail the fund in your bank account within a couple of days.
No need for Collateral and Credit Checks
Opposite to traditional secured business funds, in which you have pledged some of your assets as collateral. That means you have to promise some of your assets like land if you are unable to repay the fund. Whereas in the merchant cash advance, there is not any kind of requirement. Therefore, this is a good choice for small business owners who do not have assets to promise as collateral.
Similarly, in traditional funds, the lender sees the credit statement of the borrower, to check if he is eligible to pay the fund. Whereas in merchant cash advance, there are not any provinces related to the credit check. Thus, this is a great advantage of the merchant cash advance.
Easy eligibility criteria
In traditional funding, there are several eligibility requirements involving high credit, collateral, and many more. However, on the other hand, the merchant cash advance does not have these requirements. In this, all lender wants is your credit and debit card sales of past years. Hence, for small business owners, this is a better choice.
Flexible repayment options
Thus, in merchant cash advance, lender and borrower sign an agreement for the payment. In this agreement, they both decide the repayment period of the fund based on the monthly statement of credit. Therefore, the borrower has to pay in the decided period for which he signs an agreement.
However, a merchant cash advance is a good option, but think your options through. One can go for a merchant cash advance if he requires quick access to the working capital. Or want to pay the expenses of their business or have little or no collateral.
Therefore, if you are a business owner and want funds for your business immediately. However, you are opting for traditional funds. Then getting a regular fund for your business when you do not have assets, will be quite challenging. Then you can apply for the merchant cash advance. The funds from merchant cash advance can fill your expenses without any promise to the collateral.