Are you looking for some innovative products in today’s alternative lending marketplace? What about an ACH loan? What does it mean? Where can you get it easily? Just move forward to learn more on the topic.
ACH Loan: Know What It Is
An ACH (Automated Clearing House) loan is also known as an ACH advance or cash flow. Automated Clearing House can be described as a way to transfer funds from one bank account to another via direct deposit or direct payment by using ACH transaction banking.
Some consider this type of loans a “cash flow” loan. The reason is that the lender doesn’t look at your credit card transactions and is just interested in the average daily balance of your business checking account. Once you get your approval, the loan provider starts withdrawing payments right from your checking account.
Given the abundance of business funding providers in the modern lending industry, it’s crucial to work only with a reputable business funding provider like First American Merchant. FAM, an award-winning alternative online lender that’s considered an A+ company by the BBB, proudly offers an ACH loan to merchants across the country.
First American Merchant is a top high risk lender and processor dedicated to helping you hire new staff, obtain new equipment, launch marketing campaigns, expand, and cover other key expenses to fight the growing competition in your field.
FAM’s popular ACH funding program is also called “Bank Only” funding. It gets merchants funded even when there’s no merchant account. To know whether you’re a good fit for the program, just look at these requirements:
- 500 FICO Score
- 6 months in business
- 10k in gross monthly deposits
- Less than 3 NSF’s per month
No tax returns or financials are required for FAM’s ACH program. All you need is to provide your bank statements concerning 3-6 months of business, a copy of your driver’s license, a copy of a voided check, plus a copy of your lease with landlord contact information. Funds can be available in 5 days.
Benefits of ACH Loans
Traditional lending has somewhat limited opportunities for merchants with less-than-stellar credit scores. Since an ACH lender withdraws payments right from your checking account, the lender is faced with fewer risks, thus enabling poor credit merchants to get a loan.
Common uses of ACH business loans include:
- Customers paying a service provider
- Employers depositing funds to an employee’s checking account
- Consumers transferring money from one bank to another
- Businesses paying a supplier for products
- Taxpayers sending funds to the IRS or local organizations over the Internet
What’s important, the application and approval processes don’t keep merchants waiting. Besides, unlike bank loans, impaired credit won’t break your deal. 2+ years of credit history isn’t a must. Also, no collateral required. However, quick access to working capital makes rates go higher. Also, the loan amounts aren’t usually larger.
When it comes to ACH direct payments and direct deposits, they enable processing transactions electronically, which can’t be said about paper, which is slower.
As for an ACH business loan vs an MCA (merchant cash advance), they have similarities but also feature some repayment differences. First of all, MCAs aren’t loans: they’re simply a sale of your future business receivables.
Finally, with an MCA, the lender is paid back by withholding a percentage of your credit card deposits as opposed to bank deposits. Beyond that, an ACH features a set daily repayment, but an MCA offers repayments that’re a percentage of the days’ credit card deposits.
So, if you think ACH loans are hwat you need, turn to a true professional in the field to enjoy the best deal.