Wondering how you can increase your business cash flow, without putting your business assets at risk? Maybe you’ve never before explored the possibility of taking out a merchant cash advance for your small business, because, well…you didn’t think you’d qualify? Or you are not exactly sure how this type of lending program works?
In the last few years, lenders have realized the importance of supporting small businesses because they are the lifeblood of America. Yet, many small businesses struggle to obtain the funding they need to thrive. The Babson College The State of Small Business in America 2016 report indicated that while many companies rely on banks to provide a primary source of funds, small businesses often receive less than half of the amounts that they request. This can make it difficult to plan expansions, cover payroll, and invest back into the business. For this reason, merchant cash advances for small businesses have emerged to provide a more reliable source of capital.
WHAT IS A MERCHANT CASH ADVANCE?
In the most basic of explanations, a merchant cash advance is not a small business loan, although it is a quick and secure way to raise money for your small business. A merchant cash advance is nearly what it sounds like: an advance payment factored against your small business’ future revenues, processed by your merchant credit card program. How it works is that a lender that provides merchant cash advances will provide a lump sum of money to the small business owner, determined by the average of monthly credit card receipts.
A recent survey conducted by the Federal Reserve indicated that, “60% of American consumers prefer using credit and debit cards over cash”, therefore more small business owners are tapping into this as a convenient and steady source of income. Lenders who offer merchant cash advances can do so because they have established relationships with the major merchant credit card processors, therefore they have the security of knowing they will be repaid over time.
HOW MUCH MONEY CAN I GET USING A MERCHANT CASH ADVANCE?
In most cases, the merchant cash advance can be anywhere from 50% to as much as 250% of your average credit card sales, and the money can be deposited into your bank account within 48 hours from approval. The daily credit card sales are determined by an average going back from 3 to 6 months, and there can be minimums required for approval. Repayment terms can start immediately from receipt of funds, and are based on a small percentage of each future credit card payment.
WHAT ARE THE BENEFITS OF USING MERCHANT CASH ADVANCES FOR MY SMALL BUSINESS?
As with any financial program for small businesses, there can be some key advantages to using merchant cash advances.
EASY TO GET APPROVED FOR THE MONEY YOU NEED
The biggest benefit for a small business owner who chooses to use a merchant cash advance is the approval rate, which is generally quite high as long as there is a merchant credit card payment processor in place. This is a whole lot less stressful than dealing with all the paperwork and hassle of dealing with a bank. Forms can be filled out online or by phone in a matter of minutes, and with a few simple questions and proof of income, you can look forward to receiving your first merchant cash advance in no time at all.
YOU GET PAID FIRST, WITH NO UPFRONT OR SURPRISE FEES
In the small business world, being paid first is certainly a plus. A merchant cash advance is a way to make this happen, and generally one of the quickest ways to get paid too. There are no processing fees or deposits required upfront. This can be especially important in a financial emergency or to cover payroll expenses. Terms are simple and transparent, with no surprise or hidden costs.
REPAYMENT IS FLEXIBLE AND MANAGEABLE
Unlike small business loans that require a certain amount paid every month to avoid interest and late fees, a merchant cash advance has very flexible repayment terms. Repayment can occur over a 90 day to 18 month period, with very small payments taken from every future credit card receipt you process. If you have a growing business and strong sales, it will take very little time to repay. In fact, you can even take out additional merchant cash advances in the future once you pay down the current balance.
NO RESTRICTIONS ON HOW THE MONEY MAY BE USED
The merchant cash advance is money you can use for whatever small business purpose you may have. There are no requirements to prove where the money is being used, no expenses to track, and no worries over any agencies asking where the funds came from. It’s a perfectly legitimate way for any small business to obtain working capital to pay for business expansion, new innovations, upgrades, or even for hiring new talent.
PERFECT CREDIT AND COLLATERAL ARE NOT NEEDED
A small business merchant cash advance can be the perfect solution if you have bad or limited credit. Because most companies have access to credit card processing, this is all you need. No collateral. No credit checks. And no co-signors. The merchant cash advance can give your business a boost with a fast source of cash that you can put to use immediately, with zero risk to your property or good business reputation.
To find out more how merchant cash advances can benefit your small business, be sure to get in touch with United Capital Source today. Our knowledgeable and experienced financial representatives are waiting to help you now.