It is not uncommon for small business merchants to experience a lack of working capital, especially when they are trying to grow their business. Whether it’s a chance to expand or gain exclusivity of a new product line, when the perfect opportunity presents itself a merchant needs to have the cash to take advantage of it. Often you need to act quickly and a traditional bank loan is not always a viable option. A merchant cash advance is a great alternative for obtaining working capital. It can avoid many of the challenges of the traditional business loan process, allowing you to seize the opportunity to grow your small business.
What is a Merchant Cash Advance?
The merchant cash advance is different from a business loan. It is a purchase and sell agreement offered by alternative finance companies and online lenders. In return for funding, you as the merchant agree upfront to sell the lender a portion of your sales at a discounted price. To repay the lender, they will receive a predetermined percentage of your daily credit or debit card sales until the cash advance has been repaid. The amount to be repaid is the amount of the cash advance plus the interest. While the interest rate can be a bit higher, for many small businesses a traditional bank loan can be extremely difficult or impossible to obtain.
Simple Application Process
If you’ve ever applied for a traditional bank loan of any kind, you know there is a ton of paperwork involved. Applying for a merchant cash advance is a simple process and requires minimal documentation. Alternative finance and online lending companies use big data technology to gather the necessary information to make a determination and you can apply right online. This streamlines the process, allowing you to receive funding faster.
Less Than Perfect Credit
Every small business hits a rough patch when funds are tight and bills aren’t paid right on time. This can leave a merchant with a less than stellar credit report. With a merchant cash advance, your credit score isn’t the only thing considered. Alternative and online lenders look at the whole picture. The amount of time in business and your potential for growth are significant factors in making a determination as well. Because of this, merchant cash advances have a higher approval rating than traditional small business loans.
With a traditional bank loan, you have a set payment amount every month. That has to be paid regardless if you had a profitable month or not. Because the payments on a merchant cash advance are a set percentage of your actual sales, if you have a slow month your payment will be lower, giving you a little breathing room. In addition, the cash advance is set up so the payments are automatically deducted from your sales so you never have to worry about remembering to send a payment or being late.
Receive Funding Fast
When a perfect opportunity presents itself, it’s vital to the growth and success of your business that you act fast. With online applications, minimal documentation, and the use of big data technology, the process requires less time and effort on your part and provides a quick determination. This eliminates the weeks or even months of waiting on a traditional bank loan that may or may not be approved. In most cases, alternative and online lenders can have your application approved in days and funded within 24 hours of approval.
Ready to Grow Your Business?
A merchant cash advance is a great way to help you reach your long term business goals. CFG Merchant Solutions can help you take the next big step in expanding your business. Our team of experts brings over six decades of institutional investment banking experience in the credit, commercial finance, and capital markets. Our merchant cash advance, as well as our other financing solutions, can help your small business grow. Apply now and get your business moving in the right direction.