As some of you already know, I am currently marketing for a merchant cash advance company. As with any of my jobs, I take a personal perspective on the product or service being offered.
I had never heard of a merchant cash advance before I started here. Now that I have, I think it is a great concept that has a real benefit for small businesses. That said, these so-called “poor credit unsecured loans” can be a real burden if used improperly.
I will attempt to create an outline of scenarios where a bad credit business loan may be the wrong choice.
1. You are in a position that you really need the money, but have no real means of paying it back.
2. You don’t really need the money. The reason that you are getting the merchant cash advance isn’t important enough to justify the cost.
3. You have great credit, there is no time restraint and you can easily get a bank loan.
4. Your use of the merchant cash advance won’t expand your business or create new revenue.
5. You plan on using the business cash advance for personal use like a vacation or a new car.
Of course this is not a definitive list. But is does serve to illustrate some way’s not to use a bad credit business loan.
I wouldn’t be doing my job if I didn’t also list so of the more legitimate reasons for getting a merchant cash advance. So here goes;
1. Qualification for a merchant cash advance is easier than with traditional business loans
2. Even with less-than-perfect credit, you can be approved. That why it is often referred to as a Bad Credit Business Loan.
3. Flexible repayment terms — repayment is based on sales volume, not a flat rate
4. No personal liability for repayment of the cash advance. Which is why I like to call them poor credit unsecured loans.
5. Gives you more money in your pocket to improve cash flow
6. You can get more money from a merchant cash advance that you can generally get from a traditional bank loan.
7. Unlike bank loans, you are not restricted on what you use your funding for (to be safe, please refer to the above list).
8. Simple application/approval process
9. Gives you money in about 1 week as opposed to the 4-8 weeks it takes the bank.
There you have it. As you can see there are pro’s and con’s to merchant cash advances. When used properly, they can add tremendous benefit to your business.