Small business owners’ credit issues negatively affect operating their business. If a business owner suffers from bad credit, it will make it difficult if not impossible for the owner to secure funding from a local or national bank. Even if a traditional lending source is willing to work with a business that has bad credit, it will mandate a large amount of collateral.
In addition, the rates for a small business loan will be much higher for individuals with bad credit than for individuals who have a good credit situation; this is due to the “high risk” categorization involved when offering a small business loan to a bad credit recipient. Even if a business owner with bad credit is considered by a traditional lending source, the approval time can take too long.
The liquid capital can come too late or be too little to help the business avoid further debt. It could also further diminish the business’ credit rating and credibility. Small business loans also involve complicated contracts and extensive documentation. This service is just not convenient or timely for the business owner in a tight spot.
These reasons are why many business owners are turning to alternative lending sources to secure merchant cash advances. The big advantage is that a business can get a cash advance with bad credit. With First American Merchant Funding, for example, credit scores below 500 are approved. In addition, you can expect to receive your funds within 72 hours from application; this is a huge advantage over a small business loan. The programs are simple and flexible, and no tax returns or financials are required.
Merchant cash advances ultimately provide business owners with the “breathing” room they need. The revenue based collections means you pay the provider when you get paid. Your payments are a percentage of your daily sales. If you experience a slow month, you will pay back less. When you have a busy month, you will pay back more. This flexible structure is designed to help businesses succeed.
If you have been denied a small business loan because of bad credit or you are simply dissatisfied with the requirements and wait time involved, a merchant cash advance may be the flexible option your business needs. Alternative lending sources like First American Merchant Funding understand that rough times can befall anyone. A merchant cash advance keeps this in mind, offering fast, simple and flexible solutions to your needs.