Benefits of Merchant Cash Advances

The 5 Benefits Of Merchant Cash Advance To Your Company

Note that cash is vital for any industry, and this is particularly evident for the start-up and mid-sized companies. This is because cash is required to make various payments, keep up inventory and expand your company. Note that there are various reasons that can make a credit market accessibility to change any given time whereby financial slump or business being considered as risky serves as the best examples. Once this happens, the majority of companies will tend to seek for a new solution. Bear in mind that the only solution to this problem is securing a merchant cash advance loan.

A merchant cash advance can be defined as an unconventional source of financial aid for business owners. The business owners might lack the required credit rate requirement or security that is needed to secure a preferred bank funding.

Always note that a MCA is very different from an ordinary loan. Typically, it is buying of a certain percentage of the company’s credit and debit card transactions at a discounted price. Even though the lender has the right to receive a percentage of the business’s credit card transactions every month, the company can get a lump sum that is given to them at the outset of the agreement. The article below outlines some of the reasons why a merchant cash advance is a perfect alternative for you.

Applicants with poor credit history are accepted

A bad credit history can prevent you from securing a loan from a financial institution. Nevertheless, one of the benefits of a merchant cash advance is that those with bad credit rating can still get the funds they need, even if their credit score is less than 500.

Higher approval rate

Small business loans have strict credit prerequisites, complicated agreements, and extensive paperwork.  Since merchant cash advances are not based on the credit score of an individual, period in business or financials, then the rate of approval is surprisingly high.

No credit or collateral is at stake

Another benefit is that merchant cash advance is a sales transaction and not a loan. For this reason, they are not indicated on the credit report and do you don’t need collateral to get the funds.

Simple and easy application process

Note that a conventional loan can take several months for the application to be approved. On the other hand, a merchant cash advance can be accessible within the 14 days that the application is processed.

Straightforward and stress-free repayment plan

The application procedure for a merchant cash advance is not just simple and stress-free, but also their collection process is as well simple. Bear in mind that a merchant cash advance repaying plan is income-based.  This means that the moment you have a busy month, you will have to pay more and when your business experiences a slow month, you will be paying less. The percentage-based repayment plan is the best alternative since it allows a company to expand instead of draining its finances.