Merchant Cash Advance - Top Five Benefits Over A Regular Loan

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Are you looking for an instant funding option for your business

? Is the economic slump retarding business growth? Is a poor credit rating stopping you from acquiring the funds it needs? Are you exhausted by the rigmarole involved in getting a loan sanctioned? Do you want to procure cash in a quick, simple and efficient way? If yes then merchant cash advance (MCA), also called a business cash advance, is the answer that will finally ease your troubles.

Merchant cash advance is a blessing for small and medium-scale businesses, offering them a rapid and easy means of acquiring money for things like maintaining inventory, settling invoices in a timely manner and for taking advantage of new opportunities. With merchant cash advance, you exchange a portion of credit card receipts for an advance of cash. MCA providers charge a fixed proportion, typically around 8 % of total credit card receipts in a month. If the downturn induced shaky credit scores or collateral prerequisites are stopping you from securing commercial bank loans, then an MCA is especially a helpful choice for you.

MCA offers various advantages such as discussed below.

1. No collateral at stake

Merchant cash advance is treated as a purchase or a sales contract and not a loan. Hence, if you are unable to pay back, it does not affect your business credit rating unlike business loans that can create chaos in your credit report. You also do not face the danger of losing pledged security, making MCA an extremely secure funding alternative for your business.

2. Simple application and disbursement process

You can normally retrieve an MCA application form from the providers website. Filling the application is a breeze as it does not involve entering tax returns, financial statements or business plan as accompanying documentation.

MCA providers simply rely on two criteria - monthly credit card returns and longevity of business - to appraise your appropriateness for receiving the advance and estimating the sum. Typically, you should have monthly credit card receipts amounting to at least $5000 and more than nine to twelve months in business to be considered for funding.

3. Speedy turnaround

Merchant cash advance being a minimum paperwork deal promises short turnaround time. With MCA, you can get the funds within a week of submitting the application. This is a huge plus point over traditional bank loans that impose waiting periods of weeks or months, keeping you from settling your bills, paying your employees, buying inventory and capitalizing on emerging opportunities.

4. High approval rate

MCA vendors value your current business performance over credit history. Even if you haven't got a very good past record you can still procure a loan without being discredited for a poor credit report. Your average credit card sales in the last few months will determine your MCA funding amount.

5. Revenue-based payments

Unlike customary bank loans with fixed monthly payments, MCA payments synchronize with your monthly credit card sales revenue. You an unchanging fraction of your monthly sales. When your business is thriving you pay more. When your business is going through a lean period, you are asked to pay lower sums. This approach ensures that the advance never turns into a burdensome fiscal liability on your business, draining all its funds.

While these benefits are significant, MCA gives you much more. It gives you a competitive edge by enabling you to take advantage of emerging opportunities without losing precious time. In business, losing time is losing money. If you keep waiting for a bank loan to get approved, you give the game away to competing businesses. Choosing a merchant cash advance over a conventional loan can take your business to the new heights it deserves.

by: Daljeet Sidhu.

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