Alternative forms of lenders have come up to make up for the shortcomings of the traditional lenders. A form of an alternative loan that many are familiar with is the merchant cash advance. This has grown popular for a number of reasons chief among them being the simple nature of applying for it and the prompt response offered by merchant cash advance providers.
Those who have tried applying for traditional loans could attest to the lengthy and tiring application procedures. Many verifications have to be made and bad debts and the requirement of a form of collateral discourage many possible clients. This is especially the case for many small scale businessmen who have been locked out by some of these issues. Coupling this with the high decline rates for the small scale businessmen loan applications, the situation becomes simply unbearable for this kind of businessmen.
A merchant cash advance seems to be a suitable and reasonable option for many of the small-scale business owners. This also applies to those who are in risky and unstable ventures since securing a loan from the traditional lenders would be mostly an exercise in futility. In order to keep their business running in times of cash crunches, looking for a prompt and reliable lender is quite key for them. A merchant cash advance acts like the best shot of getting through such times.
On average it would take about a day or at most three days for a merchant cash advance to be approved and disbursed to a client. Those who have inadequate working capital could thus utilize this to meet their recurrent expenses. A business owner can also use a MCA loan to expand his/her business or even cash in on a business opportunity that has recently arisen. For you to qualify for a business loan you ought to provide your business’s financial statement, the daily credit sales of your business and your estimation of the future credit transactions you are likely to make.
The existence of alternative lenders such as merchant cash advance providers has made the process of repaying for a loan to be more manageable for small scale businessmen. You will be required to make daily repayments based on a fixed rate which will be applied to your business’s daily credit transactions. For the high sales volume days, you will have to pay higher amounts compared to the days characterized by low credit sales. This is kind of sustainable though relatively expensive in the long run. What is more important is that the client will have enough cash to carry on during the low sales volume times.
Though merchant cash advance has been preferred by many, it is good to put into consideration the fact that it is the most expensive form of alternative lending. The rates charged by the MCA providers could range from 10 to 100% which highlights how expensive lending can get to be. Although many small scale businesses have benefited from services offered by MCA providers, it will be interesting to see how it all turns to be in the near future