A Merchant Cash Advance Isn’t Actually A Small Business Loan
There are a number of routes to secure financing for your business, but not all of them involve a bank loan. A merchant cash advance is really a form of factoring. Factoring is a practice whereby a business sells its anticipated credit card sales to a third party – the factor – at a discounted price in exchange for working capital with which to fund the business quickly.
In today’s working situation it is no secret that many new businesses are having a very hard time getting approved for normal business loans through a bank. The banks are overly tight-fisted with their funds right now. Fortunately business cash advances from factoring agreements are still available and the items need to qualify are much less harder than those found at the local bank.
To obtain a business cash advance, most factoring companies require a business to have been in operation for at least a year and processing credit cards for at least six months. Since repayment of the funds is directly tied to credit and debit card sales, proof of this income is also necessary.
A piece of these future credit card receipts is agreed upon as the daily repayment capture, simplifying the financial hardship for the business owner in a slower period. Unlike a conventional small business loan, the daily capture feature allows business owners to pay back at their own pace instead of being responsible for set monthly payments that could end up in the business going out of business.
Because there funds not attained in a conventional loan, if the merchant fails to meet the conditions of the agreement, for example, using different merchant accounts to process payments, they are still held personally responsible for the balance.
However, for many young businesses, this method of financing is still the best. Flexible repayment terms, fast access to needed funds and less cumbersome acquisition of said financing, makes a merchant cash advance a great option for many entrepreneurs.
Dating back to early 2008 Daniel Samoohi has assisted thousands of business owners in finding reputable providers in order to review quotes for a merchant cash advance. By making providers compete with each other, Daniel helps businesses in finding great deals for merchant cash advance.
categories: Small Business Loan,Small Business Loans,Business Loan,Business Loans,Credit Card,Credit Cards,Business Cash Advance,Merchant Cash Advance,Credit Card Processing,Merchant Account,Loan,Loans,Business,Small Business
