‘Merchant cash funding’, the financial industry coinage has been lexically broadened to encompass all sorts of short-term financing options. However, these cash advance programs are very different from other corporate financing alternatives in nature and purpose. The best merchant cash advance providers have adopted a streamlined financing mechanics to encourage business start-ups and to boost small business growth. These microcredit programs meet the precise needs of the business owners who do not qualify for the bank loans and who look for flexible repayment options. These financing options are often categorized under loan for small business. However, since the contract defines the ‘cash advance’ as the ‘purchase price’ for credit card sales over a limited period.
Business cash advance for all
Critics of Merchant Cash Advance (MCA) made it a point that these advance financing packages are limited in scope and not every business can qualify for this. However, the concept has already been proven successful and many forward-thinking entrepreneurs have actually benefitted from MCA plans. Initially, restaurants and retail stores would qualify for these cash advance schemes. But the list of industries served was expanded to make room for other businesses as well. The general eligibility criteria for this type of cash advance program are:
• Businesses that maintain a certain amount in monthly credit card sales/monthly gross sales (best merchant cash advance providers require $10,000 as a minimum)
• Businesses that are not working with other ‘cash advance’ providers
• Businesses that do not have existing tax liens on business property (s)
• Businesses that can provide pertinent financial documents and proof of credit card sales.
The qualification baselines stated above prove that any small or mid-size business has high chances to qualify for this type of loan and that the borrower needs not show any collateral. MCA providers are making inroads in the current market scenario because big banks are not really interested in giving loans to small coffee bars or boutique sandwich shops. The sad reality of this troubled economy is that small businesses are finding little space to expand and grow. The cash advance providers provide loan for small businesses and these financing options seem the only option left for the small firm owners who often need to pinch pennies under constraining circumstances.
Things to consider before choosing a provider
You need to be very careful while choosing a particular provider. This is because not all MCA providers offer the same set of T&C and eligibility criteria also largely vary.
Do you understand the T&C?
Have you read the small prints of the purchase contract? Have you clearly understood the repayment terms? Make a note here that some providers require a fixed amount on a daily basis regardless of your daily sales whereas some others require borrowers to pay back a certain percentage of their daily sales.
Has the provider quoted you an APR (Annual Percentage Rate)?
If you know the APR in advance, you can easily calculate how many months it may take to repay the entire amount borrowed.
Comparing the cash advance schemes of the best merchant cash advance providers is also imperative. Move on if all banks have turned their backs to you. There are other financing options available.
Are you looking for best merchant cash advance providers? Elite Funding is America’s most trusted funding source, arraying a horde of loan for small business options for aspiring entrepreneurs. Visit site to apply or know more about our cash advance programs.