You may think the only option you have for quick cash for your small business is a conventional loan from a lending institution, but there is one more way in which you can get your needed funds. One such alternative funding option available is a merchant cash advance provider.
Merchant cash advances are an alternative to conventional loans. While some business owners like merchant cash advances there are others who would only consider this as a last resort due to the following reasons.
- One Merchant Cash Advance likely leads to another
- Total costs for this cash advance is high
- Daily repayment schedules can cause profitability problems
- Some owners find it impossible to repay
- Fees and interest can be at least 30% and well past 300%
1. Merchant cash advances provide you with the money you need right up front. You repay these funds including interest and all fees through your future sales.
2. You make payments on a daily or weekly fixed schedule that automatically draws from your business bank account, including all the fees.
3. The provider for your merchant cash advance sets the rate depending on what kind of risk you present to them.
4. Considering all the fees for your loan raises your loan amount considerably.
5. It is vital that your company shows a sizeable daily profit to repay the funds.
6. The determination of when you get your advance paid off is dependent upon your sales which naturally fluctuate causing you to take longer in paying off the funds. The payment to the merchant provider remains the same regardless of your company profits. A fixed percentage of your daily sales mostly depend on your daily credit card profits.
7. A merchant cash advance is quick with a little paperwork, based on your credit worthiness.
8. You do not have to provide any collateral.
9. A Merchant Cash Advance can throw your struggling business in a cycle of debt that you find hard to climb out because there are no laws that limit this lender from charging exuberant rates of interest.
10. A Merchant Cash Advance offers a solution when you cannot get a conventional business loan.
Repayment of this type of funding comes directly from your daily credit card profits. It is based upon your credit card sales offering a quick and easy way to obtain need funds for your business. The funds you receive depend strictly on your credit sales. A merchant cash advance, provider stakes a claim to the future profits of your company and this can be a good thing or cause your business to fold.
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