If you’re having a hard time keeping your business afloat or you just need money to fund a small business expansion, you can consider merchant cash advances. But what is a merchant cash advance? It is a type of business funding that helps businesses access money for various purposes.
Merchant cash advances have flexible uses. It’s one of the most easily accessible types of business funding when it comes to approval, which means it’s great for startups.
Let’s see how it works:
How Does a Merchant Cash Advance Work?
In a merchant cash advance, a lender provides money for various business purposes. The business pays it back with its generated profit, and it doesn’t require collateral. It’s more flexible than other financing types and gives quick cash flow for different business needs.
A merchant cash advance can adapt to your business and how much profit it generates. This makes the business owner more confident in their ability to pay it back. Its flexibility is based on different factors like your average turnover, profit, etc. The Merchant cash advance is one of the most common types of business funding out there in the market.
Several websites can help you find the best merchant cash advance for your business. Although the concept of merchant cash advance is essentially the same, the products will differ according to the lender you choose.
For instance, the interest rate would differ, or perhaps, the borrowing limit. However, you should also remember that lenders also consider your credit viability. It means that even if you found the best business financing for your business, your relationship with the lender or your business creditworthiness will still be factored in. So why should you opt for merchant cash advances? Here are some reasons why.
The Qualification is Easy
The most significant advantage of merchant cash advances is that it’s easy to qualify for one. While typical banks have strict criteria for a merchant cash advance, lenders like CreditNinja can have fewer requirements.
Although they still do background checks, the most important thing for a lender is your ability to pay the cash advance back. So as long as you prove to them that your business can pay them back, you have a good chance of being qualified for the cash advance.
The Process is Fast
Typical business loans, especially ones from the banks, can take a long time to process. Even after getting approved, it would take the bank several weeks to deliver the money to your business. Also, their application is lengthy and can be complicated at times. However, when you get a merchant cash advance, the process is quick and easy.
It’s almost instant, as your application will be processed the same or the next day. If it gets approved, you’ll get the money as fast as the next two business days. It means that if you applied on Monday and got approved, you will get the money before Saturday or even sooner.
You Don’t Need to Have an Excellent Credit
Your chances of getting approved for a cash advance are much higher than other types of business financing. It makes a merchant cash advance an excellent choice to keep your startup afloat or to expand it. However, since startups don’t have credits yet, they typically have difficulty getting approved for business financing.
Luckily, merchant cash advances are accessible even for startups. It’s because, as mentioned earlier, the most important thing for lenders is your business’s ability to pay back the cash advance.
One of the best things about merchant cash advances is their repayment structure. In a typical business loan, you will be paying a set amount of money every month. It makes it hard for businesses if their revenue is fluctuating.
However, in a merchant cash advance, you’ll only pay a small percentage of your monthly profit back to the cash advance. The keyword here is a percentage, which means your monthly payment will depend on your monthly profit.
Merchant cash advances are one of the best business financings out there on the market. Not only is it flexible, but it also has a better repayment structure than most business financing.
Most lenders have merchant cash advances; however, the interest rate, borrowing limit, and qualification criteria can be different. So, if you’re looking for flexible business financing with easy application and repayment, you should try merchant cash advance.