Let’s get this out of the way: A bank loan is the worst idea for a business who needs to borrow money. The repayment schedule is terrible, the interest rates are high, and the collateral and pressure can leave you worse off in your personal life. If you are in need of funding, consider a merchant cash advance. However, while those who have used this service love it, you may not be eligible.
A merchant cash advance is not a loan, but rather a buy-in to your future sales. Your merchant account provider will funnel the funds to your merchant account, and payments are taken from that same account. Payments are taken on business days when you have made sales, in an agreed upon percentage. These small payments help you make money, but keep your repayment on schedule. Also, merchant account providers know that if you do not make money, or cannot make money, neither do they. This repayment schedule is the best for most businesses.
The benefits are great, as well. You can get your cash in as little as three business days, and merchants with bad credit are often accepted. There is also very little paperwork, since your merchant account provider already has your details. There is also no collateral. While the benefits are great – in fact, far better than a bank loan – some merchants may not be able to take advantage.
A merchant must have a merchant account to have a merchant cash advance. Some merchants may also have higher interest rates, but on average even the high interest rates are lower than a high interest bank loan rate. You also need to make sure that you get your merchant cash advance from a reputable and educated provider, as the industry is currently unregulated. An unskilled lender can leave you with issues. A knowledgeable lender, like FAM, can leave you without any worries.
Many merchants need funding, and there are many avenues that they can go down. The worst possible one is a bank loan. For many merchants, once of the best is a merchant cash advance. Contact your merchant account provider today to learn more about this funding option.