Are you planning to take out a business loan or merchant cash advance (MCA)? What’s the best type of merchant funding for business owners who lack the necessary cash on hand? This article is here to help you with this.
Merchant Funding to Grow Your Business
In the modern world of business, you can’t grow your business if you lack the necessary capital, especially if you’re an eCommerce business. Working with a reputable business funding provider like First American Merchant, which has an A+ rating with the Better Business Bureau, you can make your life easier.
FAM, goes above and beyond to help merchants get the best merchant services they need. With FAM, you can be sure to enjoy speedy access to working capital. In some cases, you can apply and get funded even the same day.
Your payments will automatically be withdrawn from your card transactions. You won’t make any fixed monthly payments. So, merchant funding from First American Merchant is something to really try.
FAM’s popular merchant cash advance, as a highly popular type of business funding, takes into account your business performance instead of personal credit, years in business or financials when determining your eligibility.
All you need is to complete FAM’s simple online application, which will take only a few minutes. FAM will then follow through to make the process complete and set up an account for you. What’s more, First American Merchant offers a unique consumer financing solution to help merchants make headway in their business operations.
Popular Merchant Financing: Merchant Cash Advance (MCA)
Now, let’s find out more about a merchant cash advance, as a highly widespread merchant financing option. Technically, an MCA isn’t a loan: it’s simply based on the credit card sales of a business. You just agree to sell a percentage of your expected credit card sales in exchange for immediate funding.
By the way, if you want to figure out how much funding you need, just calculate the amounts you think will be required for each of your expenses. Then, compare these calculations with the following:
- Your ROI
- How fast you can pay off debt
- Whether or not you’ll accumulate more debt later on
An MCA is a striking alternative for those who:
- Need funds to quickly purchase the inventory they need at a reduced price
- Want to take advantage of a special marketing venture
- Need a solution for a short term financial issue
- Want to build credit since they don’t report to credit reporting companies in this case
- Don’t want to lose their home since MCAs are unsecured
MCAs are characterized by higher rates as compared to other types of business funding. Before signing the agreement, be sure to have a positive ROI. Also, remember that when you have a slow season, your payment will be down too with an MCA.
With an MCA, you may be faced with:
- Tripled APR
- When raking in the credit card sales, you pay off the MCA faster, so your APR increases
- No benefit to make early repayment
- No federal regulation in the MCA field
- Probability of getting into a debt cycle because of the speed and ease of an MCA
- Contracts can cause confusion
So, if you’re obsessed with an amazing idea for your business but don’t have the necessary funds, turn to a respectable business funding provider to see what type of merchant financing is the best fit for you.