New entrepreneurs face more than a few challenges when getting their businesses off the ground, and chief among them is how to raise capital. Small enterprises often find it hard to acquire the finances they need to stay afloat because, in a traditional lender’s eyes, they have a much greater chance of failing than larger established companies.
Thankfully, merchants now have more than a few alternatives to bank loans with regards to funding their operation. One of the more popular options is a merchant cash advance; a financing solution that is ideal for business owners with bad credit, or operating in high-risk industries.
But even when getting a bank loan is possible, you can still benefit a great deal from signing up for a merchant cash advance.
Below are a few good reasons why to get an advance:
- Fast and easy application
Getting a merchant cash advance usually only involves filling a one- or two-page form online, reading through the terms and agreeing to them. Consequently, cash advances take a much shorter time to process than bank loans, whose applications are often accompanied by a lengthy list of requirements. If you can’t afford the time needed for the processing of loans, a merchant cash advance is a perfect alternative.
- Repayment is not by fixed monthly installments
Unlike a loan, a merchant cash advance won’t require you to make fixed monthly payments at the end of every month. Instead, your provider gets a small percentage of your credit card sales, which recurs until the advance is cleared. This means repayment may be easier, especially if your sales are slow at first. Because the collection process is revenue based, you won’t have to worry about a loan taking up all your profits at the end of the month.
- High chances of approval
If for one reason or another you have been finding it hard to acquire funding from traditional lending institutions, try your luck with a merchant cash advance. Because advance providers are usually only interested in proof of steady sales, there won’t be strict credit requirements and complicated contracts to hinder the success of your application.
- High-risk applicants are accepted
Businesses operating in highly regulated industries such as pharmaceuticals or firearms dealerships can find it nearly impossible to get financial services from banks and other mainstream lenders. If you are a high-risk merchant in need of funding, merchant cash advance providers are more likely to consider your application than banks. Even the so-called “most high-risk” merchants can acquire the funds they need to grow their business.