Top Seven Benefits Of Opting For A Merchant Cash Advance Over A Business Loan

Posted on October 7th, 2010 in Uncategorized by iptools  Tagged , , ,

The economic slowdown is an arduous time for businesses looking for loans. However, anxious businesses can look at the new financing source on the block - merchant cash advance (MCA), also called a business cash advance. It is a novel avenue for business funding. MCA differs from customary loans as repayments are in the form of daily cut of credit card revenue. Businesses can apply for MCA if they have been in business for at least 9 to 12 months and have decent credit card revenue every month.

Procuring traditional loan is an uphill undertaking for small and medium sized companies as it involves drawn out application cycle, stringent approval standards, and low rate of approval. On the contrary, a merchant advance can be obtained with minimal paperwork and within a short approval period. MCA is a blessing for small businesses looking for instant financing to a maximum of $250,000.

Following are the top seven benefits of getting a merchant cash advance instead of a regular bank loan:

1. Faster application processing: The processing of MCA is finished in one week as opposed to the long waiting periods needed for conventional loans. Some providers sanction the advance within one day and transfer the money in 7 business days.

2. No interference in how the funds will be utilized: MCA providers are not concerned about the likely deployment of the advance. It is the business owner’s right to use it as she desires. The owner can make use of the funds for settling rent payment, catch up on tax payments, buy inventory, fund growth, etc. or even to settle some personal debts.

3. Trouble-free application process: The phrase “No pain, no gain” does not ring true for MCA. Financial institutions such as banks insist upon detailed business documents and ask various prying questions to get a grip on the the past, present, and future plans of your business before considering you for a loan. MCA providers are only interested in the monthly credit card sales receipts and the time in business. You should have been at least nine months in business and averaging at least $5,000 in monthly credit card receipts. Paperwork in the form of tax returns or account statements is not required. There are no upfront expenses or application fees - the bane of standard bank loans. Online approvals are also possible.

4. High approval rate: Poor FICO scores, bankruptcies, and below average credit history do not harm your chances of getting approved for MCA. Providers weigh your current business performance to verify your worthiness for MCA. For instance, a business averaging $50,000 in credit card receipts per month in the preceding year can get approved for almost $75,000. (Numbers may vary for different providers).

5. No collateral required as security: MCA providers cannot seize business or personal property if there is a business failure and the advance is not paid. This is a big positive for small sized businesses. No collateral or individual guarantees need to be staked. MCA is treated like a purchase of future revenue and not a loan.

6. Automatic deductions for repayments: Repayment of merchant cash advance is truly hassle-free. Either the business agrees to remit a certain proportion from its monthly credit card receipts or the credit card processor is directed to divert the repayment amount every month. This eliminates the need to mail payment checks, and possibility of paying penalties for delayed payments.

7. Repayments based on sales volume: The repayment amount changes every month based on the credit card sales receipts. When the going is good, repayment is more and if sale drops, repayments get adjusted accordingly to a smaller amount.

Merchant cash advance is a boon for small businesses without the wherewithal to avail loans from banks and other financial institutions. As banks get even more tight fisted, MCA is definitely a flexible and business-friendly financing option.

Merchant Cash Advance Loan - Greatest Advantage Is No Collateral Necessary

Posted on September 26th, 2010 in Uncategorized by iptools  Tagged , , ,

Are you scared that the worldwide credit crunch will leave your business with inadequate funds? Is a poor credit score holding you back from securing funds for your business? Is the risk of putting your private assets at stake keeping you from applying for a bank loan? Would you be interested in a financing alternative that is not only fast and hassle-free but also does not need a collateral? If yes, then merchant cash advance or business cash advance is ideal for your business.

Dangers in staking personal assets for a business loan

Although home equity loans offer low interest rates, lengthy repayment schedules and tax deductible interest reduces their practicality for small businesses. If your business ventures start to turn a loss, your house can be claimed by the bank.

Similarly, when you offer vehicles as collateral, you give your bank possession of vehicle’s title. In case you miss your loan repayments and your loan defaults, lender has the right to claim your vehicle. Taking on a secured loan is an extremely risky option in these economically unstable times. You can steer clear of this pitfall with merchant cash advance.

How can merchant cash advance providers lend without pledging securities?

Pledging a guarantee has been an indispensable part of the business of loaning money since its inception. They are a lender’s defense against default. So what makes merchant cash advance providers not need the security of a collateral?

Let’s go into what makes merchant cash advance funding successful without a collateral. First, in the networked and easy-access internet age, it is straightforward for providers to recognize real borrowers and creditworthy businesses from those not so successful. To evaluate your eligibility, lenders check your credit card sales volumes, which can be accessed easily and confirmed. Secondly, that repayment is not a choice after you sign the agreement. Since installments are deducted through the credit card payment system, lenders are pretty much covered.

Great thing about this type of loan is that the providers only charge a percentage that allows you to comfortably maintain regular operations. As part of the agreement, a fixed percentage of your monthly credit card sales receipts are paid out to the provider. This functions well as your daily repayment is reduced when sales are slow and do not turn into an needless burden.

Matching funding solutions to business situations

While a home equity loan may be more suitable in a number of situations, business advance is perfect when you are looking for low-risk, speedy and hassle-free financing. The fall of the credit industry post the recession and zero collateral makes these loans just right to pull up struggling small and medium-sized businesses. It is senseless to depend on slow and risky banks loans when superior options are on hand. Business advance is the newest advancement in commercial lending. Remember, nothing matches no collateral in funding and merchant cash advance is the current leader in current economic crisis. Daljeet Sidhu is the author of this article.