Similar in nature to a small business loan, a Merchant Advance is working capital a entrepreneur gets for various reasons that is necessary to be paid back within a 6 to 8 month time period depending on how much financing is received. Merchant Advances are becoming progressively more utilized as local lending institutions are tightening their necessary criteria for small business loan approval.
Distinct to conventional bank loans, Merchant Loans don’t stipulate for perfect credit. As a matter of fact, if you were denied by the conventional banks and want access to funding in a fast amount of time, a business cash advance may be a great solution. As a merchant would expect, the conditions put upon such cash advance products commonly include higher interest rates since the advance company is taking on a higher risk.
Most programs allow the entrepreneur attach the repayment schedule to income levels of the business. This is extremely useful to a small business owner that has large variations in revenues from month to month. Payment is directly tied to Visa-MasterCard purchases, allowing for smaller payments during bad months. This feature is very useful to those businesses who are seasonal in nature because a fixed payment each month is not required.
A Merchant Advance can be of particular use to those entrepreneurs who have not been open for long. To get a normal bank loan or a loan from the Small Business Association, a merchant will be required to give verification of collateral, an extensive business history and a credit report with perfect scores. When a merchant is just starting out in business, this may not be possible, especially in today’s economic climate.
However,being careful is recommended when in the market for a Merchant Advance. It is not uncommon to find growing payment plans, application costs and a mandatory switch to a specific credit card provider. Reviewing the fine print of any arrangement is a must. For those small business owners who find themselves in need of funding and have few alternative choices available, the business advance can be very helpful as opposed to waiting months for a traditional small business loan you most likely won’t get approved for.
Dating back to early 2008 Daniel Samoohi has helped thousands of business owners in finding reputable providers in order to review quotes for a Merchant Advance. By making lenders compete with each other, Daniel assists businesses in finding great bargains for a Merchant Advance.