With banks becoming increasingly stringent about dispensing small business capital funding, entrepreneurs are abandoning commercial loans and looking to other funding solutions to keep businesses competitive. Over the years, merchant cash advances (MCAs) have emerged as popular alternative financing solutions for business owners who need quick and easy access to money. If you are the owner of a small business, here are some reasons to consider MCAs.
Easy To Secure Approval
MCAs have emerged as one of the best business funding solutions because they are easy to qualify for. While banks have rigid eligibility requirements and mountains of red-tape to deal with, providers of MCAs offer a quick and simple approval process. Merchant cash advance applications are mostly online and consist of a short questionnaire. MCAs have high approval rates and business owners can have funding approved within hours if they meet eligibility criteria.
Less Emphasis On Credit Score And Collateral
Relaxed eligibility criteria are another reason that makes MCAs one of the best business funding solutions available in the market today. Business owners with a history of less-than-perfect credit find it near impossible to qualify for a business loan. MCA providers do not give much importance to credit score. Instead, they focus on historic business revenues over a period of time to determine eligibility and ability to repay. Moreover, they do not ask for collateral – so you don’t have to worry if you don’t have anything to put up as collateral or about losing your asset in case you default on repayment.
Linked To Future Business Earnings
Flexible repayments are one of the main reasons that make MCAs an easy business funding solution. Technically, a merchant cash advance is not a loan. It is an upfront amount that is advanced to you and deposited in your business bank account. In exchange for the advanced amount, you pay a percentage of future receivables on a daily or weekly basis until the entire advanced amount and applicable charges are paid off. Traditional bank loans require you to pay a fixed amount every month, irrespective of what your business earnings are during that period. Repayment of an MCA is linked to business earnings and a business owner can repay at a faster or slower pace, depending on business revenues.
Can Be Used For Any Purpose
There are many situations in which small business owners may need easy business funding. For example, when they want to buy inventory that’s available at a discounted price or to gear up for increased demand. They may need funding to cover day-to-day expenses such as payroll that may be difficult to provide for in the lean season. Alternatively, they may want to hire additional staff to provide better customer service during peak season. Business owners may require additional funds to cover unexpected expenses such as repairs or replacements. They may seek additional funds for business expansion activities or marketing campaigns. A merchant cash advance can be used for any of these purposes.
Whether you need working capital or business funding – a merchant cash advance can help your small business stay alive and flourish. For best outcomes, partner an experienced and trustworthy provider!