If you’re struggling to keep your business afloat, or just need the cash to fund a small business expansion, you may want to consider merchant cash advances. But what is a merchant cash advance? It is a type of business finance that helps businesses access money for a variety of purposes.
Merchant cash advances have flexible uses. It’s one of the most easily accessible types of business financing when it comes to approval, which means it’s ideal for startups.
Let’s see how it works:
How does a merchant cash advance work?
In a merchant cash advance, a lender provides money for various business purposes. The company repays it with its generated profits, and it does not require collateral. It is more flexible than other types of financing and provides fast cash flow for different business needs.
A merchant cash advance can be tailored to your business and the profits it generates. This makes the business owner more confident in his ability to repay him. Its flexibility is based on different factors like your average turnover, profit etc. The merchant cash advance is one of the most common types of business financing in the market.
There are several websites that can help you find the best cash advance for your business. While the concept of a merchant cash advance is essentially the same, the products will be different depending on which lender you choose.
For example, the interest rate would be different, or maybe the borrowing limit. However, you should also remember that lenders also consider your credit viability. This means that even if you have found the best financing for your business, your relationship with the lender or your business creditworthiness will still be taken into account. So why should you go for cash advances to merchants? Here are a few reasons.
Qualifying is easy
The most important advantage of merchant cash advances is that it is easy to benefit from them. While typical banks have strict criteria for a merchant cash advance, lenders like CreditNinja may have less requirements.
Although they always do background checks, the most important thing for a lender is your ability to repay the cash advance. So as long as you prove to them that your business can repay them, you have a good chance of qualifying for the cash advance.
The process is fast
Typical commercial loans, especially those from banks, can take a long time to process. Even after getting the approval, it would take the bank several weeks to release the money to your business. In addition, their application is long and can sometimes be complicated. However, when you get a merchant cash advance, the process is quick and easy.
It’s almost instantaneous, as your request will be processed the same day or the next day. If approved, you will receive the money as quickly as the next two business days. This means that if you applied on Monday and got approved, you will receive the money before Saturday or even earlier.
You don’t need to have great credit
Your chances of getting approved for a cash advance are much higher than other types of business financing. This makes a cash advance from a merchant a great choice for keep your startup afloat or extend it. However, since startups don’t have any credits yet, they usually have a hard time getting approved for funding a business.
Fortunately, merchant cash advances are accessible even for startups. This is because, as mentioned earlier, the most important thing for lenders is the ability of your business to repay the cash advance.
One of the best things about Merchant Cash Advances is their repayment structure. In a typical business loan, you will pay a fixed amount each month. It makes it more difficult for businesses if their income fluctuates.
However, in a merchant cash advance, you will only repay a small percentage of your monthly profit in the cash advance. The keyword here is a percentage, which means your monthly payment will depend on your monthly profit.
Cash advances to traders are some of the best business finance out there. Not only is it flexible, it also has a better repayment structure than most corporate finance.
Most lenders have merchant cash advances; however, the interest rate, borrowing limit and eligibility criteria may be different. So, if you are looking for flexible business finance with easy application and repayment, you should try the Merchant Cash Advance.