subject: The Dynamics Of A Business Cash Advance [print this page] Any business owner will inform you just how difficult it is to obtain a line of credit from a conventional bank when the need arises. Gratefully, a business cash advance made obtainable by providers will bridge the gap between attainable cash and desired funding.
The business cash advance model has gained popularity over the last several years primarily because of the reduction in bank financing. Companies started to search elsewhere for their cash flow needs and credit card factoring brokers have responded. Even though you will a higher cost for the money the qualification requirements are a small portion of what is asked for at a conventional bank. No heavy financial statements and bad credit is accepted by most industry leaders.
All merchant cash advance programs are arranged as a factoring agreement. This is a focused arrangement where a business will sell a part of its projected credit card sales to the broker in return for cash in you bank now. There are many advantages to this arrangement.
Key advantages of a Merchant Cash Advance
Quick Turnover Time. Conventional Lenders are burdened by their magnitude. You typically find yourself going back and forth with phone calls and paperwork. Every time you call for status they demand for another item. It's like you can't call them to find out about your own loan. It could take a long time before your funds, if accepted at all, is on hand. With a merchant cash advance, your business typically receives an approval in a day and the cash in your account in a week. This is a large step up on what has become the norm in the business financing sector. This new product assists with a fast infusion of money in a quick time frame.
Repayment Terms.
When repaying a typical bank loan you are required to make the same monthly payment regardless of your current volume. Miss a payment and not only will you incur late fees but they will probably freeze your credit line. That can create very stressful times. A merchant cash advance is tied directly to your credit card receipts. The months your business earns more, you pay more, and when you receive less, you pay less; a much more reasonable model. In addition, the payment is fixed at a low percentage subtracted from your credit card receipts so there are never any late fees. And once you reduce the advance by 70% you can qualify for additional funds.
Required Documentation
To obtain a bank loan you will need an entire ream of paperwork. Tax Returns, Credit scores, financial statements, R&E, and more are requested just toqualify. With a business cash advance, all you need is a decent credit score and a confirm-able history of credit card receipts. Normally four months of merchant statements will suffice.
Businesses understand that it isn't always possible to forecast expenses. A machine breaks down, business grows quicker than imagined, or an investment comes along that you can't pass up. Business cash advances are accessible for just these reasons. If you find yourself in need of capital, seek out a merchant cash advance broker.
by: Rodney Rabah
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