Why Merchant Cash Advances Might be Just What Your Business Needs
When it comes to securing financing for your business, there are many options available to you. One of the most beneficial (and often overlooked) types of financing is a merchant cash advance. Getting a merchant cash advance is a smart alternative to applying for a standard loan, and it’s a great option for businesses that need money to pay for inventory, payroll or any other expense. Additionally, merchant cash advances are typically easier to obtain than traditional loans and don’t require perfect credit.
How a Cash Advance Differs From a Loan
Merchant cash advances aren’t actually loans. Instead of borrowing money from a lender and promising to pay it back at another date, the lender agrees to give you money in exchange for a portion of your monthly credit card sales. So, you get the benefit of receiving a lump sum of cash right when you need it, and the lender gets to retrieve a portion of your future credit card sales until the advance is repaid.
Benefits of a Merchant Cash Advance
A merchant cash advance can offer a variety of benefits to your business. Here are a few:
- Easy application process
- Automated, hassle-free payback terms
- Applicants with bad credit can be approved
- No collateral is required
Applying for a merchant cash advance is surprisingly easy, especially when you compare it with the process of applying for a commercial loan. You can expect the approval process for a commercial loan to take weeks or possibly even months, but a cash advance can be processed and available within a single week.
Since cash advances don’t require regular monthly payments, you have one less thing to worry about as a business owner. Instead, the lender automatically takes a portion of your credit card sales (as agreed upon by both of you) to repay the advance. The process is simple and hassle-free.
Even if you have bad credit and have been turned down for other types of loans, you still have a great chance of being approved for a cash advance. For this reason, merchant cash advances are a popular source of funding for businesses that have come across challenging financial times.
Finally, a merchant cash advance doesn’t require any collateral because it’s not a loan. Instead, it’s a sales transaction. For this reason, it is not reported to personal credit bureaus.
A merchant cash advance is a great choice for businesses because it’s easy to receive approval, the payback terms are automated and hassle-free, and no collateral is required. If you’ve had trouble getting approved for a regular loan, a cash advance may be exactly what your business needs.