Why You Should Opt For a Merchant Cash Advance

Strict loan repayment procedures are some of the things that make many distance themselves from the traditional bank loans. Many are required to start paying back immediately they receive their money. This strictness level is what leaves many skeptical when it comes to applying for traditional bank loans. At times, revenue may trickle in slowly in one’s business.

Paying back such loans when you don’t have that regular flow of income can be very challenging. One option most businesspersons can try is applying for a merchant cash advance. Commonly referred to as the MCA, it is an advance which is payable on the credit sales of a specific enterprise. It is the right type of funding option for small businesses that want to increase their revenue within a set period.

In this funding option, the advance provider will first agree on the amount with the businessperson, the amount to be paid back and also the holdback percentage. It is after the agreement that the amount is transferred to the account of the business person in exchange for credit card receipts and a set rate of what is considered as receivables.

Some bit of the amount made within a specific day is withheld to pay the cash advance lender as agreed. This will continue until one finishes paying their advance. The more the transactions, the faster the repayment. There are several reasons why business owners should opt for this type of funding option. They include:

 

Bad Credit Does Not Matter

Bad credit is not an issue when borrowing a merchant cash advance. It is a different case in traditional bank loans where a good credit score is one of the top considerations for one to become eligible. The things that are considered in merchant cash advances include personal and business credit scores.

No Collaterals

You will not be required to present collaterals which is the case in traditional business loans. They can be in the form of assets or some of the valuable things you own. They can be seized if you default your loan. This can be difficult for small business persons who may lack any collateral to present. Cash advances have other legal options for recovering their money and do not need any guarantees.

Easy Repayment

The repayment process can be complicated for most business person in traditional loans. Merchant cash advances have an easy repayment process that suits your flow of cash. Money is usually deducted from your account depending on your credit sales.