The Bank Said No … Now What?
A merchant cash advance may be an option to consider if you are trying to access capital but your bank won’t OK your loan.
Today’s independent business owner has many business challenges, but few challenges are greater than experiencing a lack of access to capital through traditional lending institutions. Many banks have tightened their lending requirements and may be less likely to approve a business loan request.
Where does a business owner go to get the capital he or she needs for inventory, expansion, debt consolidation, new equipment, a remodel, purchase a new sign or other needs?
While there are a few options, there is one of which many business owners are largely unaware: a merchant cash advance. You may be scratching your head and asking yourself … what is a merchant cash advance? When AutoInc. asked a small group of members about this topic, several indicated they wanted to learn the pros and cons of such an option.
A merchant cash advance allows you to leverage one of your greatest untapped assets: your future credit card sales. Simply put, a business agrees to sell a portion of future sales to obtain the capital needed today to grow the business. The merchant cash advance company charges a funding fee (generally referred to as a factor rate) that would be incorporated in the funding amount and would then retain a fixed percentage of your credit card sales (typically Visa/Master Card/Discover) until the advance has been paid.
There are many companies that offer this type of funding. Here are a few things to consider when selecting a merchant cash advance company:
As you can see, there are some things you should ask before considering a merchant cash advance, but in today’s credit market, it’s good to learn about all of the options to ensure you choose the best solutions for your business.
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