Acquiring an easy online business loan can be intimidating enough but getting a rejection can be soul destroying, especially for the new small business owner. The MCA or merchant cash advance type of online loan is the most flexible; it’s the fastest and easiest way to get cash for a business. Here, the typical reasons for rejection for a business loan will be outlined. Then, the reasons for seeking a MCA and why it’s less likely the borrower will get rejected.
- Non-Existing or Inadequate Credit: Typically, the first thing a traditional lender will scrutinize is the credit of the borrower. Simply put, there is a definite minimum the borrower must have before a traditional lender will even look any further into their application. This happens most especially with banks but there are others. This can have detrimental effects on the new borrower.
The MCA Loan: For most MCA loans all that’s needed is to look at the credit score for the purpose of repayment interest amounts. If the score is what that particular easy online business loan office decides is too low, the interest rate is going to be higher but does not solely constitute means for rejection.
- Collateral Issues: Most traditional lenders will want to scrutinize the borrower’s collateral. The loan will typically depend on a number of the owner’s assets.
The MCA Loan: The MCA easy online business loan will not depend on the worth of the borrower’s assets if the borrower has at least $10,000 in monthly credit card sales. This is because the repayment plan can be based on an agreed upon monthly profit amount instead of assets.
- The online business loan is under $150,000: Banks especially want the borrower to ask for loans that exceed that amount. This means, as may have been guessed, more money for the bank.
The MCA Loan: Any MCA loan can be for whatever amount the borrower needs within limits. But, certainly not the limits the banks want to set. As long as the minimum requirements listed in this post are met, there is not much of a minimum. This gives the borrower a much more flexible playing field to expand their business and inventory any way they wish.
- Small Businesses Pose a Higher Risk: Post-recession, consumer loans and loans for large corporations were considered an even better risk than small businesses for banks. So today, the requirements prove too stringent for the small business owner to apply and even if they are accepted, the repayment plans and interest rates for a new business especially do not leave room for error. Life happens and little things change that can really throw a small business for a loop.
The MCA Loan: These types of easy online business loans are not concerned with the economy in the same way banks are. It’s simple: have enough cash in credit cards coming in and a business checking account and maybe enough physical assets and you can talk turkey.
The Merchant Cash Advance way of lending is by far the most prudent way where a small business can find the cash they need to succeed.