Small businesses often turn to banks for loans to ensure smooth business operations. But getting a bank loan approved is not very easy and is a daunting and time-consuming task. The application involves the lot of paperwork apart from that lot of information needs to be gathered and organized to present it to the bank. In the recent years, banks have more strict in scrutinizing the information provided by the business owners for the loans resulting in turning down those loans with insufficient information. Hence it is advisable for a small business owner to avail merchant cash advance to make the funds to flow into the business easily. A lender generally decides on the amount of loan of approved based on the sales made by the borrower. Although availing funds is easy with merchant cash advance, the entire process can be given a boost when you have the required information readily on hand.
Here are the five steps that you need to follow when applying for a merchant cash advance to get it processed quickly without any problems.
- Know your Preferences
It is important to know where you stand, what you want and why you want loan before applying for a loan. And depending on your business finances and accounts, you should be able to decide what kind of loan obligation will be suitable for your business. It is not advisable to go for loans just maintain free cash on hand but should justify or serve a purpose apart from having cash.
Do research into the details of the lenders that your friends and family recommend. It does not matter whether you are going to apply for the loan or not but collecting the details will always help you to compare the similar loans offered by competitors. Ask questions and discuss everything you want to know about the loan including necessary materials, documents, processing period and approval time. Loan processing and procedure differs with each lender and knowing them will help you in preparing properly.
- Know your sales
Unlike banks, merchant cash advance lenders do not usually pay much focus on past credit usage and repaying capacity for approving loans and hence having low credit score and irregular payments will not matter. However, your general business through merchant terminal is recorded by the lender to work on the amount that can be advanced.
- Document checklist
Make a checklist of the documents required by the lender for the loan application. The checklist will help to check whether the required documentation is on hand when applying for the loan in person. Incomplete applications and documentation can often result in delayed approvals.
- Have the right expectations
Applying for a merchant cash advance is a viable option when you are in urgent need of money rather than applying for a bank as banks have certain protocols for approving the loan and releasing the funds. It is always advisable to discuss the details of application approval and loan disbursement and as to when can you hear from the lender, on the loan application.