If you are a small or medium sized business owner and are tired of waiting for approval for a bank loan, are getting exhausted due to the endless paperwork involved, and the recurring documentations required? If yes, then it is time for you to look for non-bank business loans that are easy to avail with minimal efforts. There are secured business loans and unsecured business loans. Secured business loans need you to provide any fixed asset that either you or the company owns to secure the loan. The secured business loan should opt as a last resort to fund a business as it can often lead to blocking your assets from further funding. Unsecured business loans can be availed based on business turnover in the last year and are free from collaterals.
Merchant cash advance options are the best for small businesses that are looking for unsecured business loans. But before you apply for merchant cash advance, you need to understand whether it suits your requirements, serves the purpose of availing funds and whether the business can repay the cash advance. First of all, you need to know and understand exactly what merchant cash advance options are available and and how they work for businesses. It is a lump sum cash advance against future sales of the company, which means the lender buys future sales of the company at a discounted price. The amount advance is recovered from the borrower as a percentage of sales either on daily basis or a specific period mentioned by the lender.
Businesses that accept sales payments via credit or debit cards and having a minimum sales turnover specified by the lender are eligible to apply for the cash advance. The merchant account provider retains that percentage of the sales and transfers the rest of sales proceeds to the business account of the borrower. The merchant account provider does so until the entire loan amount is recovered. There are several benefits of availing merchant cash advance.
Unlike traditional bank loan applications that take several weeks to months to get processed merchant cash advances are approved in as less as 72 hours of time, and the amount is deposited within a week in the business account of the borrower.
No Hidden Costs
Merchant cash advance loans will not need you to pay any upfront or closing costs, unlike conventional loans.
High approval rate
The merchant cash advance is not approved based on credit score and collateral, and hence the procedure is short, and approval rate is high. The lender decides on the cash advance amount based on the sales history and future sales of the company.
The cash advanced to you is recovered by the lender as a portion of daily sales and is not fixed. The repayment amount fluctuates with a number of sales, and hence there is no fixed tenure for the loan repayment. You are not obligated to pay big amounts when the business is low as the repayment amount depends on a number of sales.
The repaying rate for Merchant cash advance options are slightly higher than other unsecured business loans but is justified as it can be availed by small businesses quickly, easily even with bad credit and without any collateral.