In your first years as a business owner, you frequently run into financial issues. Starting up a company usually takes so much money that you need months’ or years’ worth of profits to break even. When you need financial help, don’t just turn to traditional loans; explore alternative financing options such as merchant cash advances. This form of financing involves a third party giving your business the amount of money that you expect to receive from your credit card transactions each month. While these advances do have interest rates, you should consider them for the following reasons.
Quick Access to Funding
Companies that provide this type of cash advance generally grant approval within a few days at the latest. Traditional lenders often take weeks or even months to approve loans of the same amount. Especially in the financial world of a small business, this waiting period can be far too long for your business to survive.
No Effect on Personal Credit
Frequently, you allow your personal credit to be affected by your business transactions. While this is often beneficial, particularly if your business is so new that it has no credit history, if something goes wrong, it can be devastating for your personal finances. When you use merchant cash advances, you can relax and know that if a disaster occurs, you will still be able to borrow money for your mortgage or car payments.
Easily Accessible to New Businesses
Traditional banks are often skeptical about lending money to new businesses since they have no credit histories, low credit scores and a high chance of struggling to repay major loans. However, companies that specialize in cash advances do not pay as much attention to these factors. Instead, they prioritize how many credit card transactions your business completes every month. While the exact number varies depending on the company and your business’s circumstances, most are willing to grant advances to companies whose credit card transactions total at least $2,500 per month.
Lots of Options
Many different companies provide cash advances, so you have lenders to choose from. Before settling on a company, look at their fees and the terms and conditions. Keep in mind that they may vary greatly from company to company, so never sign a contract without reading it first.
Merchant cash advances give small and new businesses access to the funding they need to maintain their production. Investigate different programs today and find one that fits your industry and business plan.