Steady cash flow is integral to the success of any business. However, in stressful financial times it is sometimes difficult for entrepreneurs to come up with solutions to cash flow problems. One possibility worth looking into is a merchant cash advance. This involves a lender purchasing a portion of your future credit card sales in exchange for a needed lump sum of money. Here are some benefits of taking advantage of this form of funding.
You Can Obtain Funds Quickly
Loans from traditional banks may take weeks or months for application and approval, if your company qualifies for them at all. In contrast, the process for obtaining a merchant cash advance is simple, straightforward, and quick. You need to submit your business plan, financial statements, and tax returns. The financing company considers the length of time you have been in business and the level of your credit card sales. All of this takes a week or less.
Approval Rates Are High
Unlike traditional bank loans, which are extremely difficult to obtain, merchant cash advances have much higher approval rates. If there are any problems with your application, the financing company works with you to resolve them.
Collateral Is Not Necessary
Even if you are not able to offer collateral, you don’t need to worry when applying for a merchant cash advance. Because you pay back a percentage of future credit card sales, no collateral is necessary. Additionally, because your loan is linked to sales, it does not show up on your credit report and therefore doesn’t impact your credit score.
Loan Repayments Are Easier
When you receive a loan from a traditional bank, you have to pay back the same amount every month whether sales are up or down. With a merchant cash advance, though, your payments are a percentage of sales, so when sales are down your monthly payments are less.
For more advice on obtaining a merchant cash advance, get in touch with Star Capital USA.