A merchant cash advance is a business organization that gives out capital to credit card accepting companies in their list. It is not necessarily a loan. Once the business makes a sale in the future, a slight deduction is given to the company. Many small businesses are enrolling with these companies especially over the last couple of years because of the many advantages accrued from it.
Most of the transactions between the company and the business are exactly that; business deals. There are no legal consequences that are bound by the agreement. The business credit rating is not affected by its failure to make payment on time.
Unlike the traditional banks where you have to wait for several weeks or even months before you are given feedback on your loan application, this one is quite easy. The only thing that the company looks for is how long you have been in business and your monthly credit card returns. Many businesses are attracted by this straightforward and simple method employed by the companies.
Because of the little paperwork required when applying for their loans, time taken to process the loan application is very little. Within a span of one week you can get you cash as compared to the long evaluations done by the traditional banks before they consider you for a loan. By so doing, a business is able to take advantage of a favorable situation that may arise in the future.
They do not check on your creditworthiness so much as your overall performance over the previous couple of months. This means that any stable small business that is doing well on the radar is qualified to apply for a loan. The amount collected in terms of revenue is the one that determines how much the business will be given.
The companies usually wait for the businesses to make sales in order to collect their cash. This is one of the most comforting benefits of MCAs. Unlike the commercial loans that are paid in a fixed monthly rate regardless of the profit or loss made, the MCAs are paid in accordance with the rate of sales made by the business. The higher the sales the higher the interests, and vice versa.
Once you receive funding, you are free to do with it as you wish. When it comes to expanding your business, increasing on working capital or renovating your premises, you are the one who knows how well; you need to capitalize it to increase sales. This is different from the monotonous traditional banks that require a standard report on the way that you will put the money to use.
The best part about these companies is that you can get advanced renewals after every three months or less. Apart from the hustle free loan application, the little time it takes to get the capital and the companies having no collateral, you can also be comforted to know that you can renew your cash advance application after three months. This makes it very flexible and convenient to use.
