subject: Merchant Cash Advance - Advantages And Cautions For Today's Entrepreneurs [print this page] For those entrepreneurs with less than excellent credit scores, a merchant cash advance can surely become a necessary part of maintaining with small business expenditures.
The advantage of using credit card factoring to finance necessary business items is that there truly is no rules imposed on what you can purchase. The funds can be utilized in order to buy equipment, fix or renew a storefront or even pay off taxes.
As a merchant would expect, credit card funding has higher interest fees than those obtained from a more traditional venue, such as your nearby lender. This means that spanning the life of the advance, you pay more in addition for the right of quick access to money and fewer restrictions. On the other hand, for those who utilize credit card funding, the repayment rate is often frequently tied to the credit card receipts of the business, thus getting rid of concerns of not having enough to make the monthly payment and keep up with other business overhead.
Additional advantages for the merchant seeking funding from a merchant cash advance include:
No Collateral necessary - No fees to generate the cash advance - No restrictions on the use of cash - No fixed payment term - Quick turn around - High Approval Rate
Although a merchant cash advance creates more funding choices to a greater number of entrepreneurs, there are very few fairly specific necessities in order to qualify. Each funding company has their own different conditions, but the subsequent examples are the most commonly seen throughout the industry:
The merchant must have been open for six months to one year - The entrepreneur must have at least six months of credit card processing with a certain minimum number of credit card receipts monthly - The entrepreneur must have a verifiable lease that will be in effect for at least one more year - The funding company may need transfer of all credit card processing receipts to their machines - The business type must be acceptable and legal.
by: Daniel Samoohi.
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