When a business needs funding, they can turn to a few different sources. Some turn to friends and relatives. Some turn to crowdfunding websites. Some even turn to their bank for a loan. While the first two ideas may work for some, the latter is always a bad idea. A merchant in need of funding should never turn to a bank, because the risks involved are not worth the cash. The collateral, the hefty paybacks, and the pressure are enough to put a struggling business under. Merchant financing shouldn’t be so difficult, and with the right funding source, it isn’t.
If you are in need of funds, consult your merchant account processor. Processors like FAM offer up merchant financing options that will not cripple your business. The most popular is a merchant cash advance. While this may sound like a loan, it is anything but. With a merchant cash advance, you are not getting a loan, but rather your merchant account provider is buying into your business. This is the best option for most merchants, because the criteria to get a merchant cash advance is simple: FICO’s under 500 are accepted, and no tax returns or financial documents are required. Funding is also available in as little as three business days – which is never done with a business loan. Payments are not made by a big lump sum check at the end of the month, but rather in small increments made on business days when you make a sale.
Another option is the ACH funding plan. With ACH funding, you can obtain funds as if you have a merchant cash advance, but you do not need a merchant account to do so. With this plan, your last 3-6 months of sales are evaluated, to determine the amount you can borrow, and the percentage at which payments are taken out. As long as you have at least a 500 FICO score, been in business six months, take in at least $10,000 in sales monthly, and have less than three chargebacks per month, you are eligible.
Both of these methods are great for businesses big and small, and you should contact your merchant account processor to discuss your funding needs.