Merchant Credit Card Cash Advance Loans for Businesses
All small business owners might not have access to capital when they have a need. If
their credit rating is not very good or if they don’t have collateral to show, then
their hopes of getting a business loan are dashed. So what do they do if they need extra business capital ? One alternative business loan solution for small businesses is the merchant
credit card cash advance system.
Those who are eager to fund such small businesses are called Merchant cash advance
companies and their industry is experiencing a never seen growth in the recent years
due to the increase in demand for such business working capital. These merchant cash advance providers basically offer businesses a lump sum payment in exchange for a piece of the future income of the business through credit card sales, accounts receivables, or purchase orders. Obviously it means that the small business should have good credit card sales and the providers ensure this by reviewing the necessary statements.
Though this makes cash readily available, the business owners need to be careful about
the costs of such merchant advances. The borrowers also need to be wary of the fact that the
merchant cash advances are not depicted as business loans, so they are not bound by any lender regulating laws. At the same time the business owners need to be aware of the fact that repayment happens automatically as the provider collects a small predetermined
percentage from daily card sales of the business. In simple terms, when the
business is slow, so is the repayment. Also there are no changes in the interest
There are some points that are worth considering when the businesses are in the market
looking for a merchant credit card cash advance. They need to understand upfront, all the terms of the advance and all the fees that are involved. They should also compare the other options that they have for accessing quick business cash flow before arriving at a decision.
It is hard for small business owners these days and there is no sign of things
improving in the near future. In such an environment, they are forced to turn to any
place where they can find business capital and such merchant cash advances fill that gap in today’s bleak economic situation.