Cash plays a big part in any business. Unfortunately, it is also something that entrepreneurs are extremely short on when starting up. In a situation where cash is need and quickly, many business owners have started to turn to a cash advance as the answer.
What is a small business cash advance, and how it can benefit a small business? Many believe that a cash advance is a loan, but that is not true. A merchant cash advance is simply a sale. With 1st American Merchant Funding for example, a merchant cash advance involves a purchase of your future sales at a discount; the discounted cost is agreed upon beforehand by both parties along with the amount of sales to be purchased.
A cash advance can be a convenient, short-term credit option. Using a cash advance can also help you to effectively deal with expected financial emergencies. In addition, the time it takes to apply, process and receive a cash advance is considerably faster than a business loan.
Other benefits of a merchant cash advance include:
- High approval rate. Merchant cash advances are not based on personal credit, time in business or financials like commercial business loans are. Instead, they are based on a business’ performance.
- Fast funding and easy renewals. With 1st American Merchant Funding, the application process is fast and hassle-free. Your business can receive funding as quickly as 72 hours after submitting your application.
- Revenue based collections. Another huge advantage for the entrepreneur is that a merchant cash advance is revenue based. With 1st American Merchant Funding, “we get paid when you get paid”. If you experience a slow month, the percentage taken from your daily sales will be less. During months when you are busier, the percentage will be higher.
- No credit or collateral on the line. Another great benefit of a cash advance is that there is no collateral required, as is the case with a business loan. Since a merchant cash advance is actually a sales transaction, they are not reported on credit reports.
- Bad credit applicants accepted. For those entrepreneurs who are looking to start fresh, a merchant cash advance can be obtained regardless of bad credit. Unlike a commercial business loan with its strict credit requirements, a merchant cash advance can be secured even if your credit scores fall below 500.
These are just some of the benefits of applying for a merchant cash advance, and why many entrepreneurs have begun to turn to this funding method. If this sounds like the solution you have been looking for, take advantage of 1st American Merchant Funding’s simple, fast and hassle-free application process.