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How to Get a Merchant Loan, Regardless of Bad Credit

Bad credit can have affect your life in many ways. It can make it hard to rent an apartment, get the job you want and even prevent you from getting a cell phone contract. For the aspiring entrepreneur, poor credit can halt business plans altogether. Bad credit can not only lead to higher rates and more restrictive terms on approved loans, but also affect your ability to be approved at all. Fortunately, the creativity and flexibility of alternative providers have made it much easier for business owners with bad credit to secure the working capital they need.

High-Risk Providers

A high-risk provider specializes in working with businesses banks refuse to provide services to, like merchants with bad credit. In the eyes of a traditional provider, a merchant struggling with credit issues is simply “too risky” to extend a business loan to. This leaves the business with little to no options for their working capital needs. In many cases, these businesses are applying for funding because they need cash fast. Whether they need it to seize an unexpected opportunity, cover payroll, get equipment back up and running or increase inventory, not having enough capital can put a business in a dangerous cash-flow position. A high-risk provider like First American Merchant offers these merchants the cash they need quickly, regardless of bad credit.

Bad Credit Business Loan Options

One of the most popular options for bad credit is a merchant cash advance. A merchant cash advance (MCA) involves the lender purchasing a portion of your business’ future credit and debit card sales. In return, your business is given a cash advance as a lump sum payment. The easy, flexible collections process has also made this bad credit business loan option highly sought-after. The payments fluctuate along with your sales volume. So, during slower months, your business pays back less. During busy months, it will pay back more. These payments typically take place on a daily or weekly basis and are drawn directly from the merchant account your business uses to process debit and credit card sales.

The Advantages of Merchant Loans Bad Credit

Applying for a business loan with traditional lenders entails extensive documentation requirements, complicated contracts and strict credit requirements. Even after providing all the required financials and business history, your business could wait weeks (even months) only to hear that it has been denied for funding. The advantage of working with an alternative lender is the speed in which you receive your funds and the simplicity of the application process.

The application process for a merchant cash advance can be completed in a matter of minutes. Because approval for a cash advance is based on business performance rather than personal credit, time in business or financials, this loan alternative has a high approval rate. With FAM, you will be asked for minimal documentation (e.g. merchant processing statements and bank statements) and you hear back in as little as 24 hours.

Additional benefits of choosing a merchant cash advance with FAM include:

  • Credit Scores Below 500 are Approved
  • Receive Your Funds 72 Hours from Application
  • Simple, Flexible Programs
  • No Tax Returns or Financials Required

Are you struggling with the many obstacles having bad credit presents? Consider securing a merchant cash advance to cover payroll, day-to-day operating costs and inventory needs. This money can even help you setup a cushion of cash for your business. For more information about business loan alternatives for bad credit, contact the team of experts at First American Merchant.